Crypto bill faces Democratic backlash over new ethics rules

Key Senate Democrats are balking at the latest version of a cryptocurrency regulation bill over a White House-approved ethics provision that they argue falls short, complicating the bill’s chances of passing in the narrow window before lawmakers leave town next month.

Sen. Cynthia Lummis (R-Wyo.), who leads the Senate Banking digital assets subcommittee, unveiled an updated version of the Clarity Act on Wednesday.

The 616-page text brought together the two halves of the bill from the Senate Banking Committee and Senate Agriculture Committee for the first time. But most notable was the bill’s new ethics provision, which was recently agreed to by the White House.

The provision bars public officials and employees, as well as their spouses, from issuing or sponsoring a digital asset. It also prohibits platforms from listing such assets for trading and puts the attorney general in charge of enforcing the restrictions.

Even before the new text was released, Democrats were already raising concerns about the provision, particularly its enforcement mechanism.

“The provision that says only the DOJ [Department of Justice] would be allowed to have the enforcement responsibility, I think is just wild and unserious and stone crazy right now, given what we have seen from them,” Sen. Angela Alsobrooks (D-Md.) said at a Semafor event on Wednesday.

She and six other crypto-friendly Democrats pointed to this ethics provision, as well as a handful of other outstanding issues, in opposing the latest version of the bill later Wednesday.

“The Republican-proposed text of the CLARITY Act as it currently stands fall short,” Alsobrooks and Sens. Cory Booker (D-N.J.), Catherine Cortez Masto (D-Nev.), Ruben Gallego (D-Ariz.), John Hickenlooper (D-Colo.), Warner (D-Va.), and Warnock (D-Ga.) said in a statement.

“Key provisions including those addressing........

© The Hill