A new draft lands as the clock ticks

CoinDesk reported that the latest draft of the Clarity Act, the Senate's long-awaited crypto market-structure bill, started circulating on Wednesday, July 22. The most closely watched change is an ethics provision that would limit crypto conflicts of interest for the president and senior government officials, but only temporarily: the rule is set to sunset in 2029.

Under the draft, the Department of Justice would be tasked with enforcing ethics complaints, and regulators would have to implement the law within one year of enactment.

Democrats push back on DOJ enforcement

The enforcement mechanism immediately drew fire. Senator Angela Alsobrooks rejected the idea of the DOJ policing the ethics rule, telling CoinDesk: "This DOJ enforcing an ethics provision? That's unserious, and I wouldn't support the bill if that's the language."

On the other side, Senator Cynthia Lummis, the lead Republican negotiator, urged colleagues to finish the job, saying "It's time to land this plane" and framing the bill as a tool to help law enforcement fight illicit finance.

Democratic concerns about conflicts of interest have intensified since President Trump's financial disclosures revealed over $1 billion in crypto earnings, and it remains unclear when the limits would take effect for Trump and his business ties, including his World Liberty Financial stake.

What else is in the draft

Beyond the ethics fight, the draft preserves the Blockchain Regulatory Certainty Act section that protects DeFi developers from being classified as money transmitters. It also adds language on federal preemption, provisional registration, and commodity pool operators.

Industry reaction was cautiously positive. Digital Chamber CEO Cody Carbone called the draft "a meaningful step toward the Senate vote on the Clarity Act we've been calling for."

Why this matters for the market

The Clarity Act would establish the market-structure framework U.S. crypto has been waiting years for, defining which regulators oversee which assets and setting rules for exchanges and DeFi developers.

The timing is tight. Majority Leader John Thune reportedly wants the bill on the floor before the summer recess, with the first week of August seen as the last practical window. Passage requires 60 votes, meaning at least 10 Democrats need to get on board, and the ethics fight over the Trump family's crypto ties remains the central obstacle.

Markets stayed calm, but the stakes are high

Crypto markets barely moved on the news amid renewed inflation worries, with bitcoin slipping 0.7% to around $65,877 and ether roughly flat near $1,927. Spot bitcoin ETF flows stayed positive, with BlackRock's iShares Bitcoin Trust taking in $164 million the prior day.

If the Senate manages to pass the Clarity Act before recess, it would be one of the most consequential pieces of U.S. crypto legislation ever. If the window closes, the industry could be waiting until fall or beyond for regulatory certainty.