CLARITY Act Odds Crash to 48% as Law Enforcement Groups Oppose Section 604

Odds for the CLARITY Act passing this year dropped to 48% from 60% in three days, according to traders on the Polymarket prediction market. The slide followed a public letter from four law enforcement organizations opposing a key section of the bill.

Journalist Eleanor Terrett reported that groups including the Major County Sheriffs of America and the International Association of Chiefs of Police sent a letter to administration officials raising concerns about Section 604, known as the Blockchain Regulatory Certainty Act. The organizations argue the section would create gaps in oversight that make crypto-related crimes harder to investigate. They also said it does not apply Know Your Customer and Anti-Money Laundering rules that traditional financial institutions must follow.

The letter landed after weeks of closed-door talks involving Congress, the White House, and industry representatives. The National Fraternal Order of Police and the National Association of Police Organizations, both involved in those discussions, did not sign the letter.

Senator Cynthia Lummis pushed back against the criticism. "The Clarity Act is clear: writing code is not money transmission. That distinction will matter for a generation of builders," Lummis said. She argued the bill provides long-term regulatory certainty by ensuring software creation does not trigger money-transmitter licensing requirements.