Blockchain Association pushes back against sheriffs over CLARITY Act

In an eight-page response sent to Senate leaders John Thune and Chuck Schumer, the Blockchain Association clarified that the July 22 draft does not grant decentralized finance platforms or software developers a blanket exemption from anti-money laundering and sanctions laws. The group emphasizes that the bill differentiates between entities that hold and control assets—which would face strict Bank Secrecy Act duties—and developers who merely provide neutral software infrastructure.

Section 10604 of the bill specifically shields non-controlling developers from being classified as money transmitters. However, the association maintains that this does not provide a shield for illicit activity. According to the letter, developers who knowingly facilitate money laundering, terrorism financing, or wire fraud remain fully subject to criminal prosecution. The group also points to support from organizations like the Fraternal Order of Police and the Major Cities Chiefs Association to counter the notion that the law enforcement community is unified in its opposition.

Despite the push for clarity, the bill's legislative path remains uncertain. As the Senate pivots to a continuing resolution, the CLARITY Act has yet to be scheduled for a floor vote. With the Senate’s August recess approaching, supporters face a narrowing window to secure the necessary cloture filings to advance the legislation, which includes $600 million in annual funding for digital asset investigations through 2031.