Trump-Backed Crypto Ethics Rule Assigns DOJ Enforcement Authority
A new crypto ethics proposal backed by President Donald Trump would prevent federal officials from issuing cryptocurrencies while in office. The proposal also gives the U.S. Department of Justice (DOJ) primary authority to enforce the rule instead of state attorneys general.
The ethics provision is considered one of the final steps needed before Congress can move forward with the broader Clarity Act, a major bill designed to establish a comprehensive regulatory framework for the U.S. cryptocurrency industry.
DOJ to Lead Enforcement of the Ethics Rule
According to sources familiar with the discussions, the proposal would ban the president, vice president, members of Congress, and other federal officials from creating or issuing digital assets during their time in office.
The rule would also place enforcement responsibilities with the Department of Justice rather than individual states. This approach has become a key point of disagreement, as several Democratic lawmakers have argued that state attorneys general should share enforcement powers.
Ethics Proposal Discussed With Industry Leaders
The details of the ethics language were reportedly shared during an industry call led by Patrick Witt, the White House’s senior crypto adviser.
Multiple sources confirmed that the proposal aims to reduce conflicts of interest by limiting the ability of federal officials to benefit financially from cryptocurrency projects while serving in government.
Clarity Act Nears Final Stage
President Trump agreed to the ethics language after months of negotiations between lawmakers seeking stronger safeguards for public officials involved in digital assets.
The ethics provision has become the final major hurdle before the Clarity Act can move closer to becoming law. The legislation is expected to establish clearer rules for cryptocurrency businesses, digital asset markets, and regulatory oversight across the United States.
Democrats Raise Concerns Over Enforcement
Some Democratic lawmakers remain opposed to assigning enforcement solely to the DOJ. Senator Angela Alsobrooks of Maryland, one of the lead negotiators of the Clarity Act, questioned whether the Justice Department should oversee ethics violations involving federal officials.
The debate has also focused on Trump’s memecoin ventures and his family’s involvement with World Liberty Financial (WLF). Recent financial disclosures showed that Trump earned millions of dollars linked to the company, increasing calls for stronger ethics protections within crypto legislation.
Alsobrooks stated that she would not support the bill if the DOJ remained the only enforcement authority. However, she added that negotiations would continue in an effort to reach a bipartisan agreement.
White House Pushes for Passage of the Clarity Act
The White House did not confirm the final wording of the ethics provision but reiterated its support for passing the Clarity Act. Administration officials said they have worked closely with lawmakers to address concerns and warned that any failure to pass the legislation would be due to opposition from Senate Democrats.
The ongoing negotiations highlight the growing importance of ethics and transparency as the United States moves toward establishing a comprehensive regulatory framework for digital assets.
