WASHINGTON, / RankWire.AI / – Democracy Defenders Action, a nonpartisan advocacy group, along with Transparency International U.S, urged Congress on Monday to include stringent anti-corruption measures in upcoming cryptocurrency legislation. They warned that lawmakers must address the crypto conflict of interest loopholes or consider scrapping the entire CLARITY Act. The groups issued a joint statement criticizing the ethics provisions in the Digital Asset Market Clarity Act, contending that the current legal framework falls short in safeguarding the integrity of the digital asset market, American consumers, and the national economy from public officials’ self-dealing activities.
Legal experts representing both oversight organizations pointed out that the ethics language in the Senate draft was narrowly crafted and created significant statutory exemptions. The advocacy groups noted that the proposed draft allowed existing cryptocurrency holdings and financial arrangements to remain unaffected while lacking sufficient enforcement tools. They argued that the legislative language effectively protected pre-existing commercial ventures from federal oversight. To bring about meaningful reform, the watchdogs called for a comprehensive ban that prevents all covered government officials from holding direct financial interests, trading digital assets, or earning income from pre-existing licensing and profit-sharing agreements.
The coalition behind the proposal outlined essential policy measures to prevent public officials from exploiting federal oversight of digital assets for personal financial benefit. They insisted that covered officials and their immediate family members—including spouses and dependent children—must divest from all digital asset holdings outside of diversified registered investment funds. Additionally, the groups advocated for strict rules to stop adult children of public officials from using family ties or proximity to power to promote commercial crypto ventures. They also emphasized that full financial disclosure should be mandatory for all transactions involving digital assets, including acquisitions, sales, and transfers, regardless of compensation received.
Ethics Advocates Call for a Complete Ban on Official Cryptocurrency Holdings
Regarding enforcement, the oversight organizations argued that ethics rules must be backed by independent administrative authority to remain effective beyond individual presidential terms. They urged Congress to authorize the Attorney General to investigate violations under an extended statute of limitations and to allow private entities and state attorneys general to pursue legal remedies for misconduct. Virginia Canter, chief counsel and director of ethics and anti-corruption at Democracy Defenders Action, stated that ethics legislation lacking independent enforcement mechanisms effectively signals a green light for corruption, urging Congress to implement a total ban on digital asset interests for officials and their families.
Economic analysts and policy specialists noted that the broader legislative debate over the CLARITY Act centers on establishing clear regulatory jurisdiction over the digital asset industry. The legislation aims to create clearer guidelines between federal market regulators, moving away from enforcement-heavy approaches. Nonetheless, ethics advocates stress that public trust depends on strict boundaries between regulatory authority and private financial interests. Scott Greytak, deputy executive director at Transparency International U.S., remarked that the public expects officials to choose between regulating an industry or profiting from it, emphasizing that lawmakers must close the crypto conflict of interest loopholes or scrap the CLARITY Act to preserve government integrity.
Call for a Complete Ban on Official Digital Asset Ownership
As the Senate reviews the bill text, congressional leaders face mounting pressure from ethics organizations to resolve conflicts of interest safeguards. Oversight experts warn that exempting pre-existing commercial relationships sets a dangerous precedent for federal ethics enforcement across emerging financial sectors. Representatives from both advocacy groups reiterated that eliminating these exemptions is the minimum necessary step to restore public confidence in federal market oversight.
The future of the CLARITY Act depends on whether committee negotiators incorporate binding ethics rules before the bill reaches a final floor vote. Congressional aides reported ongoing bipartisan discussions about potential amendments to strengthen enforcement mechanisms. Ethics advocates cautioned that passing the legislation without comprehensive prohibitions on digital assets would undermine regulatory credibility and sustain conflicts of interest within the federal government.