Cynthia Lummis: Crypto Act Will Strengthen Sanctions Against North Korea Hackers

Sen. Cynthia Lummis (R-Wyo.) said the Clarity Act would close regulatory gaps that let North Korea's Lazarus Group steal cryptocurrencies. She posted on Sunday that such entities “thrive on gaps” in the current system.

The provision gives Treasury new sanctions authority, Lummis said. It also creates a safe harbor for companies to freeze suspicious transactions before the money moves. The bill's text empowers Treasury to monitor or limit digital-asset transactions tied to foreign jurisdictions that pose money-laundering concerns.

The U.S. government says proceeds from the thefts fund North Korea's weapons program.

Not everyone agrees the bill closes the gaps. Richard Nephew, former director for Iranian affairs at the National Security Council, argued the Clarity Act creates “significant loopholes” in anti-money laundering and counter-terrorism financing rules for decentralized finance and some crypto firms. He said Iran and North Korea could exploit those weaknesses for illicit transfers.