Law Enforcement Coalition Challenges CLARITY Act on Crypto Crime

A coalition representing more than 70,000 U.S. law enforcement professionals has urged federal officials to revise the Digital Asset Market Clarity Act. The June 23 letter warns that broad exemptions in the bill could weaken oversight of crimes involving digital assets.

The letter was signed by leaders of the National District Attorneys Association, the National Association of Assistant United States Attorneys, the International Association of Chiefs of Police, and the National Sheriffs’ Association. They represent prosecutors, sheriffs, chiefs of police, criminal investigators, deputies, and officers.

The coalition’s central objection targets Section 604. That provision could create blanket exemptions from registration, know-your-customer rules, Bank Secrecy Act obligations, and anti-money laundering requirements, the groups argue. They name mixers, tumblers, and certain decentralized finance businesses as categories that could slip through regulatory gaps.

The letter states: “No class of market participant should receive a blanket exemption from registration, know-your-customer (KYC), Bank Secrecy Act (BSA), or AML/CFT requirements.”

The organizations said digital assets increasingly appear in investigations of narcotics trafficking and fraud, among other crimes including child exploitation, ransomware, sanctions evasion, terrorism financing, and organized retail crime. Existing authorities help investigators follow financial trails and recover assets. The CLARITY Act as drafted, they argue, would reduce transparency and accountability.

The letter was addressed to Acting Attorney General Todd Blanche and Patrick J. Witt, executive director of the President’s Council of Advisors for Digital Assets. The coalition thanked the administration for engaging with law enforcement. The letter said its principal concerns remain unresolved.