Senators Thom Tillis and Ruben Gallego have introduced updated ethics language for the CLARITY Act that would allow state authorities to enforce restrictions on federal officials' digital token activities. This revision aims to ease Democratic concerns about relying solely on the Department of Justice for enforcement.
The change marks a shift from the initial proposal, which granted exclusive enforcement power to the U.S. Attorney General. By enabling state-level oversight, the proposal responds directly to lawmakers worried about insufficient independence in enforcement, given that the DOJ is part of the executive branch.
Ethics Enforcement Remains a Key Negotiation Point
Talks over the CLARITY Act’s ethics provisions have stretched over several weeks. In late July, the White House accepted what it described as the most rigorous federal ethics limits yet, following discussions with Republican senators Cynthia Lummis and Bernie Moreno. However, details on enforcement mechanisms were not publicly clarified at that time.
The latest bipartisan approach from Tillis and Gallego appears to be a strategic effort to secure enough Democratic backing before the Senate’s August recess, especially as Treasury Secretary Scott Bessent presses for a vote. Democrats have argued that sharing enforcement power with state attorneys general would increase accountability and oversight for federal officials involved in crypto.
With the crypto market structure bill still in flux, this revision could be a decisive factor in moving the legislation forward.
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