CLARITY draft spared adult children’s crypto holdings

A Senate draft of the CLARITY Act included an ethics provision that would have required senior federal officials and their spouses to sell or place into qualified blind trusts any equity worth $15,000 or more in companies whose principal revenue in any of the prior three calendar years came from issuing or sponsoring digital assets. The text excluded tokenized traditional assets and did not cover holdings owned solely by adult children.

The proposal applied to the president, vice president, senior executive branch officials, members of Congress and other federal officeholders already subject to public financial-disclosure rules. The draft would have barred covered officials from issuing or sponsoring digital assets for compensation as well.

The bill did not advance when the Senate failed to move it forward on Sept. 15. Republicans said the final draft incorporated a bipartisan ethics proposal and numerous changes requested by Democrats. Several Democrats argued the protections were not broad enough because the measure left a gap around family holdings held by adult children.

President Donald Trump’s certified 2025 financial disclosure showed more than $1.4 billion in 2025 income tied to crypto ventures, much of it connected to companies founded with or managed by his children. The White House has stated that the president’s private interests are managed by his children and do not influence administration policy. Under the Senate draft, equity still owned by the president or his spouse could have required sale or placement into a qualified blind trust, while interests held independently by adult children would not automatically have triggered the same requirement.

A second example involved Howard Lutnick, who stepped down from Cantor Fitzgerald after joining the administration in February 2025 and transferred ownership interests into trusts benefiting his adult children, with one son serving as controlling trustee. Public filings show Lutnick no longer held beneficial ownership of the securities tied to that structure after an October 2025 transfer. Cantor has business ties to major stablecoin issuers and has held large Treasury positions for a stablecoin issuer.

Federal conflict-of-interest rules treat spouses and minor children differently from independent adult children. Financial interests of a spouse or minor child can be attributed to an employee for conflict purposes; an independent adult child’s holdings generally are not automatically attributed to a parent. The CLARITY draft would have extended divestment or qualified blind-trust requirements to officials and spouses while leaving the adult-child boundary unchanged.

A qualified blind trust requires an independent trustee with control over the assets and limits the official’s knowledge of specific holdings so the officeholder cannot tailor policy to personal investments. Federal ethics guidance treats original holdings as known until the trustee disposes of them or they fall below the relevant threshold, meaning signing a trust agreement does not immediately erase knowledge of prior ownership.

Because the Senate never brought the bill to a final vote, the specific question of how far ethics restrictions should apply when assets move to the next generation remains unresolved. The ethics language in the draft highlighted a distinction between legal separation of ownership and ongoing family economic exposure to crypto businesses affected by federal policy.