Seven Democratic Senators Reject CLARITY Act Draft Over Ethics and Consumer Protection Concerns on July 22

On July 22, seven Democratic senators rejected the latest version of the Digital Asset Market Clarity Act, citing insufficient protections for ethics, consumer safeguards, and market integrity. Senators Catherine Cortez Masto, Angela Alsobrooks, Cory Booker, Ruben Gallego, John Hickenlooper, Mark Warner, and Raphael Warnock stated the Republican-proposed text requires stronger provisions on elected officials' ethics, consumer protection, illicit finance, conflicts of interest, and market integrity.

The revised bill, released by Senator Cynthia Lummis and Senate Republicans on July 22, would prohibit federal officials and their spouses from issuing or sponsoring digital assets for compensation. Violators could be required to surrender profits and pay civil penalties, with digital asset intermediaries knowingly listing prohibited tokens facing fines up to $250,000 per violation per day. The framework would also establish regulatory oversight between the SEC and CFTC.