The Senate’s latest push to regulate digital assets has collided with an ethics dispute that could determine whether the bill reaches the floor. Republicans released an updated draft of the Digital Asset Market Clarity Act on July 22, but seven Democratic senators immediately rejected it, arguing the ethics provisions do not go far enough.
The 616-page bill would establish a federal framework for digital assets and clarify oversight between the SEC and CFTC. Its most contentious section would bar federal officials—including the president, vice president, and members of Congress—and their spouses from issuing or sponsoring digital assets for compensation. The restriction would sunset on January 20, 2029.
Senator Cynthia Lummis, a lead negotiator, called the ethics language “the most comprehensive and wide-ranging ethics provision in history.” She said the bill is ready for industry feedback and that she was “pleased” to reach this point. But the enforcement mechanism has become a flashpoint.
The draft assigns enforcement exclusively to the Department of Justice. Democrats want state attorneys general to have a role, viewing them as more insulated from political pressure. Senator Angela Alsobrooks called the DOJ-only model an “unserious offer” and said she would not support the bill in that form. Lummis countered that allowing state attorneys general to bring cases was a “red line” for Republicans.