Republicans Release Final Clarity Act Text Before Tuesday's Vote. Here's What Changed

Senate Republicans released the final Clarity Act text on Sunday, folding in changes Democrats demanded and rewriting the ethics title that had been a sticking point. 

The substitute runs 635 pages, 5 longer than the September 10 draft. Senators vote Tuesday afternoon on cloture for the motion to proceed, which needs 60 votes.

The Clarity Act Ethics Division Gets Rebuilt

Senators Cynthia Lummis, John Boozman, and Tim Scott said the text reflects more than a year of bipartisan negotiations. Their office counted 126 substantive edits that Democrats asked for.

The newer draft (EHF26724) toughens the Clarity Act in several places that the industry will feel. The ethics division is the headline. It’s retitled and rebuilt:

• New ban on holding a “significant financial interest,” meaning $15,000-plus of equity in any business that drew a plurality of its revenue from issuing or sponsoring tokens in any of the past 3 years, with mandatory divestment or a blind trust. The earlier September draft had no holding ban at all.
• Coverage extended to presidents-elect, vice presidents-elect, and members-elect, before they’re sworn in.
• But it still stops at spouses. Children and dependents aren’t covered, a narrower reach than the federal disclosure law, which requires officials to report dependent children’s holdings.
• The 2029 sunset is deleted, along with the severability clause.
• Penalties flip from a 10% cap to a 20% floor, inflation-adjusted, and now apply to the interest itself as well as the transaction.
• State attorneys general gain standing to sue. The earlier draft barred them and private plaintiffs by name, and that subsection is gone.

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What the Final Clarity Act Text Does Outside the Ethics Title

Elsewhere, the exchange own-account rule is retitled a prohibition on proprietary trading, and its exceptions narrow from activities “in support of the business” to a test of what is “necessary,” subject to new CFTC rules. 

Exchanges and wallets, not issuers, face a circuit-breaker: if Treasury finds within 18 months that community-bank deposits are bleeding into stablecoins, it must write rules reaching yield merely “similar to” bank interest, a lower bar than the ban already in the bill, and a threat to exchange rewards programs. 

“Network token” now means a digital asset rather than a digital commodity, a broader category. States keep deceptive-practices enforcement unless preempted. CFTC exemptions must run through the CEA’s Section 4(c) process.

One trade cuts the other way. Software developers gain shields against BSA registration and financial institution status, but lose the express protection from criminal money-transmitting liability that the earlier draft gave them.

Republicans Say This Is the Last Version Democrats Get

The rewrite landed days after President Donald Trump met with advisers on Friday to discuss the ethics language. Journalist Eleanor Terrett reported that Republicans are pitching the draft as their last and best offer before Tuesday’s cloture vote.

“President Trump voluntarily agreed to unprecedented ethics restrictions, holding every federally elected official, judge, and their spouses to some of the toughest ethics restrictions in U.S. history,” Senator Lummis said.

Lummis framed the vote as a test of whether Democrats will take the deal they negotiated.

“A no vote on Tuesday means opposing real ethics reforms on politicians’ personal investments… Democrats got what they wanted; now they need to take yes for an answer,” she added.

Whether the rewritten ethics title buys the seven Democratic votes Republicans still need becomes clear tomorrow.

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