Tillis, Gallego Lock In CLARITY Act Conflict-of-Interest Rewrite

WASHINGTON — Sens. Thom Tillis (R-NC) and Ruben Gallego (D-AZ) on July 29 finalized a bipartisan rewrite of the Digital Asset Market Clarity Act's conflict-of-interest provisions, aiming to tighten limits on senior federal officials' involvement with digital assets. The updated text has not been released publicly, and aides say many lawmakers have not yet reviewed the new language as the Senate's August recess approaches. The Tillis-Gallego draft is positioned as a counterproposal to a White House-backed ethics framework unveiled July 22. Democrats criticized that earlier approach as too weak, focusing in particular on a 2029 sunset clause that would have allowed the restrictions to expire. The new revision is intended to set stricter boundaries around how federal officials can interact with digital-asset issuance. The broader CLARITY package seeks to divide oversight between the SEC and CFTC, establish clearer rules for spot markets in digital commodities, and address issues including stablecoin yields and illicit finance. The bill's trajectory, though, hinges on resolving the ethics guardrails. Gallego, a first-term senator from Arizona, was among Democrats who voted to advance an earlier version out of the Senate Banking Committee on May 14, when it cleared the panel 15-9. Senate Majority Leader John Thune has said a procedural vote could come between July 29 and Aug. 1, while also signaling doubts the full bill can be finished before lawmakers leave for the August recess. The House approved its version, H.R. 3633, in July 2025 by a 294-134 vote. The Senate has spent much of the past year revising the text, negotiating side agreements and cycling through competing ethics proposals. For crypto markets, the CLARITY Act is viewed as the most consequential push so far to draw clearer jurisdictional lines between the SEC and CFTC. Investors are also watching the stablecoin-yield provisions embedded in the bill, which could shape the outlook for DeFi protocols, centralized exchanges offering stablecoin products, and the competitiveness of U.S.-based stablecoin issuers versus offshore alternatives. The Tillis-Gallego agreement marks a rare bipartisan convergence on crypto ethics in an election year. The open question is whether the Senate treats the rewrite as vote-ready, or leaves it for after the summer break.