A revised cryptocurrency market structure bill moving through the U.S. Senate is facing growing debate over ethics standards for federal officials, enforcement authority, and the role of prediction markets that critics argue resemble sports betting and casino gambling.

Republican lawmakers recently released updated text for the Digital Asset Market Clarity Act, commonly known as the CLARITY Act, a sweeping proposal designed to establish a federal framework for the digital asset industry. While supporters view the legislation as a long-awaited effort to provide regulatory certainty for cryptocurrency businesses, opponents from both parties have raised concerns about provisions tied to ethics oversight and gambling-related contracts.

The latest version of the legislation includes a new section governing how federal officials may interact with digital assets while serving in government. According to the proposal, presidents, other federal officials, government employees, and their spouses would be prohibited from issuing or sponsoring digital assets during their time in office. The restrictions would remain in effect through 2029.

Under the draft language, violations would be enforced by the U.S. Department of Justice. The attorney general would be authorized to bring civil actions against officials or digital asset intermediaries found to have knowingly violated the rules. The legislation would also permit fines reaching $250,000 per day.

Ethics Enforcement Emerges as Major Obstacle

Although the ethics provisions were included following discussions between Senate Republicans and the White House, they have not secured Democratic backing.

The issue has become particularly contentious because the proposed enforcement mechanism excludes state attorneys general from pursuing violations. The draft specifically states that enforcement authority would rest solely with the attorney general.

Sen. Angela Alsobrooks of Maryland, one of only two Democrats who previously supported the legislation during committee consideration, criticized the approach.

“Look at this Department of Justice. They’re completely unserious, first of all, and it’s just stone crazy to rely on them for anything. A lawless Department of Justice cannot oversee this. So, I think having the attorneys general as a backstop is going to be really important,” she said according to CNBC.

Alsobrooks also indicated that the current version of the bill lacks sufficient safeguards to earn her support. “I wouldn’t support the bill if that’s the language. But we’ll keep working from that floor to reach an agreement that holds us all accountable.”

Sen. Ruben Gallego of Arizona has likewise expressed opposition to the revised measure, arguing that the ethics section remains inadequate. According to reports, Gallego and a bipartisan group of lawmakers are working on alternative language.

“This is not a serious proposal,” Gallego said.

The revised legislation would allow existing cryptocurrency ventures connected to federal officials to continue operating under certain conditions. Reports indicate that President Donald Trump would be given one year to place ownership interests into a blind trust.

The ethics debate comes as scrutiny continues over Trump’s cryptocurrency-related earnings. Recent disclosures showed that he generated approximately $1.2 billion from crypto-related activities during his first year after returning to the White House. Roughly $580 million of that total was reportedly linked to World Liberty Financial, a company co-founded by members of the Trump family that issues the WLFI governance token and the USD1 stablecoin.

Supporters of the legislation note that Trump approved the ethics language currently included in the bill.

Democrats Seek Restrictions on Sports and Casino Contracts

While ethics concerns dominate one aspect of the debate, another group of Democratic senators is pressing for changes involving prediction markets.

In a July 17 letter sent to leaders of the Senate Banking Committee and the Senate Agriculture Committee, 12 Democratic senators urged lawmakers to prohibit contracts tied to sporting events and casino-style games.

The senators argued that certain prediction market platforms are operating in ways that bypass state gaming laws and tribal gaming agreements.

“Currently, prediction markets are misusing federal commodity and derivatives rules to offer nationwide sports and event wagering, completely ignoring state and tribal gaming licenses and regulations,” the letter states.

The lawmakers contend that some platforms rely on interpretations of Commodity Futures Trading Commission (CFTC) authority to offer products that function similarly to regulated gambling offerings.

The proposal submitted by the senators would amend the Commodity Exchange Act to prohibit agreements, contracts, transactions, or swaps related to sports outcomes, athletic performance, statistics, or casino-style games from being listed or traded through registered entities.

The suggested language would also explicitly preserve existing federal, state, and tribal gaming laws, including protections under the Indian Gaming Regulatory Act, the Unlawful Internet Gambling Enforcement Act, and the Wire Act.

Among the senators signing the letter were Jacky Rosen of Nevada, Adam Schiff and Alex Padilla of California, Richard Blumenthal of Connecticut, Gary Peters of Michigan, and several others representing states with commercial or tribal gaming interests.

The group warned that the CLARITY Act and related legislation could increase regulatory uncertainty surrounding decentralized finance platforms and wagering products.

Senate Vote Could Arrive Soon

Despite the unresolved disputes, Senate leadership appears intent on moving the legislation forward.

Senate Majority Leader John Thune indicated that lawmakers could begin considering the bill in the near future.

“It’ll get a vote, not sure when yet but in the next couple weeks,” Thune told reporters Wednesday at the Capitol. He later expressed hope that the measure could reach the Senate floor as early as next week, though he acknowledged that negotiations remain ongoing.

The legislation still faces uncertainty as supporters seek the 60 votes required for passage. Cryptocurrency companies including Coinbase and Ripple continue to advocate for a national regulatory framework, while banking organizations remain critical of some provisions. A coalition that includes the American Bankers Association and the Financial Services Forum said after the updated bill was released that it “still puts at risk the local lending that drives economic activity in the U.S.”

With disagreements continuing over ethics oversight, enforcement authority, and prediction market regulation, the path forward for the CLARITY Act remains unsettled as Senate leaders prepare for a potential floor vote.