Senators have proposed new ethics language for the CLARITY Act that would allow state authorities to enforce restrictions on federal officials’ crypto activities, moving away from sole Department of Justice control. The bipartisan proposal from Republican Senator Thom Tillis and Democratic Senator Ruben Gallego was sent to the White House. Democrats had opposed the earlier plan, which gave the Attorney General sole enforcement power, questioning the Justice Department’s independence as an executive branch agency. The bill faces a critical 60-vote test in the Senate before the August recess, with Republicans needing Democratic support to advance the legislation.
Senate negotiators proposed revised ethics language for the CLARITY Act that would let state authorities enforce restrictions on federal officials’ crypto activities. The revision emerged as bipartisan talks continued before the Senate’s August recess.
Republican Sen. Thom Tillis of North Carolina and Democratic Sen. Ruben Gallego of Arizona sent the counterproposal to the White House, as reported by Punchbowl News. State authorities would also be given the option to prohibit federal officials from offering or promoting digital tokens under the plan.
The earlier proposal would have granted sole enforcement power to the U.S. Attorney General. This approach drew objections from Democrats who questioned whether the Justice Department could provide independent oversight.
On July 22, the White House said it would adopt sweeping federal ethics prohibitions. The terms came after negotiations with Republican Sens. Cynthia Lummis and Bernie Moreno.
Patrick Witt, the executive director of the President’s Council of Advisors for Digital Assets, said the administration favored regulations covering the entire federal government. Gallego has stated that enhanced safeguards were necessary for the CLARITY Act to get approval from Democrats.
Democrats have opposed measures that could allow President Donald Trump to affect the industry under his administration’s regulation. Their concerns involve the memecoin project of Trump and his family’s involvement in World Liberty Financial.
Republicans have an effective 52-47 Senate majority. The party needs Democrats to reach the required 60 votes to advance the bill.
Treasury Secretary Scott Bessent asked senators to vote on the CLARITY Act before leaving Washington. In July 2025, the House passed their version of the CLARITY Act with bipartisan support.
