In a controversial move, the White House has vetoed a CLARITY Act provision that would have prohibited U.S. officials from holding or issuing cryptocurrencies while in office. This decision has drawn sharp criticism from lawmakers and ethics watchdogs concerned about growing conflicts of interest in digital asset policymaking.
Lawmakers Divided Over CLARITY Act Provision
The CLARITY Act provision, introduced by Rep. Jim Himes, aimed to prevent the President, Vice President, members of Congress, and their families from owning or promoting cryptocurrencies during their terms. The intent was to avoid any financial bias as lawmakers shape national crypto regulations.
However, the Biden administration vetoed the provision on June 11. Although the overall bill still progresses, the removal of the ethics clause has stirred debate about integrity in public office, especially amid rising political ties to crypto ventures like TrumpCoin and World Liberty Financial.
Why the CLARITY Act Provision Matters
Critics, including Rep. Maxine Waters, argue that eliminating the CLARITY Act provision gives politicians a free pass to invest in or launch crypto projects while influencing laws that may benefit them. Waters described the veto as “a mistake that opens the door to personal enrichment.”
Supporters of the veto argue that ethics oversight should be handled separately, and including it in the CLARITY Act might delay much-needed crypto regulation clarity.
Impacts of Removing the CLARITY Act Provision
The fallout from vetoing the CLARITY Act provision could be significant. It risks undermining trust in future crypto policy and may hinder bipartisan support for the broader bill. Still, Republican lawmakers continue pushing to pass a streamlined version of the legislation before the August recess.
The administration is reportedly working to finalize both this bill and stablecoin legislation, potentially giving Donald Trump, if re-elected, a chance to sign them into law.
Final Thoughts
The White House’s rejection of the CLARITY Act provision raises valid concerns about transparency and trust. While regulatory clarity is needed, excluding ethics safeguards may weaken the bill’s credibility. The crypto industry now watches closely as Congress decides whether integrity or expediency takes precedence.
