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Congress is poised to take up a major package of cryptocurrency legislation this week, with the Senate preparing for a procedural vote on the Digital Asset Market CLARITY Act (H.R. 3633) and the House Ways and Means Committee preparing to advance separate legislation addressing the federal tax treatment of digital assets. The Senate effort has gained new momentum following the release of a revised version of the CLARITY Act by Republican senators on September 14. The updated legislation incorporates 126 substantive changes requested by Democrats, including new ethics provisions addressing digital-asset activities by federal officials and their spouses. The revised language also gives state attorneys general a role in enforcing certain conflict-of-interest provisions. 

The House passed H.R. 3633 in July, establishing a federal regulatory framework for digital assets and clarifying the respective roles of federal financial regulators. The legislation subsequently stalled in the Senate as negotiations continued over market regulation, consumer protections, stablecoins and ethics provisions related to federal officials’ digital-asset holdings.

Sen. Lummis (R-WY), along with other Senate Republicans, released revised legislation ahead of a September 15 procedural vote. The updated draft includes provisions addressing decentralized finance, Bank Secrecy Act requirements, stablecoin risks, credit-union authority and ethics restrictions. 

The ethics provisions have become a central issue in the Senate negotiations because of concerns surrounding President Trump’s cryptocurrency-related business interests. The revised proposal would establish restrictions on certain digital-asset activities by federally elected officials, federal judges and their spouses and would provide enforcement authority to state attorneys general in addition to the Department of Justice. The immediate hurdle is the Senate’s procedural vote. Sixty votes are required to invoke cloture, meaning the bill will need support beyond the Republican conference to advance to full Senate consideration. 

The House is pursuing a separate but related effort to establish clearer tax rules for digital assets. The Ways and Means Committee held a legislative hearing in June on a package of digital-asset tax proposals, including legislation addressing reporting requirements, mining and staking income, charitable contributions, tax anti-abuse rules and voluntary disclosure. 

Chairman Smith (R-MO) has emphasized the need for clearer and more workable tax rules as digital assets become more widely used. Among the proposals are measures that would reduce reporting burdens for routine transactions, clarify the treatment of mining and staking rewards, and establish more specific rules for digital-asset transactions.