A coalition of 4 main regulation enforcement organizations and a separate group of almost 100 Catholic leaders despatched letters Tuesday warning {that a} provision within the Digital Asset Market Readability Act would weaken the oversight instruments investigators and prosecutors depend on to fight monetary crime.
The regulation enforcement letter, addressed to Appearing Lawyer Common Todd Blanche and Patrick Witt, government director of the President’s Council of Advisors for Digital Property, got here from the Nationwide District Attorneys Affiliation, the Nationwide Affiliation of Assistant United States Attorneys, the Worldwide Affiliation of Chiefs of Police, and the Nationwide Sheriffs’ Affiliation.
Collectively, the teams symbolize greater than 70,000 prosecutors, sheriffs, chiefs of police, investigators, and different regulation enforcement professionals.
Their central concern is Part 604 of the invoice — a provision that comes with the Blockchain Regulatory Certainty Act, or BRCA, which might set up {that a} developer or infrastructure supplier who can not transfer or management a person’s digital property isn’t a cash transmitter beneath federal regulation.
Proponents argue the language is crucial to guard software program builders from prison prosecution. Regulation enforcement teams counter that the exemptions are too broad.
“As at present drafted, Part 604 dangers creating gaps in oversight and accountability that might impede these efforts,” the teams wrote, including that their concern is “not with people who merely write or publish software program code, nor with accountable technological innovation,” however somewhat with exemptions that might defend actors who facilitate the motion of digital property whereas obstructing investigators.
The teams additionally contend the invoice falls quick on anti-money laundering and countering the financing of terrorism necessities, declaring it doesn’t set up suspicious exercise monitoring and reporting obligations similar to these utilized to conventional monetary intermediaries. They warned that sure provisions might exempt mixers, tumblers, and a few decentralized finance companies from AML and know-your-customer necessities.
The opposite letter, despatched to Senate Majority Chief John Thune and Senate Democratic Chief Charles Schumer, carried signatures from roughly 80 organizations and leaders, together with the Alliance to Finish Human Trafficking, the Jesuit Convention’s Workplace of Justice and Ecology, and dozens of Catholic sisters and survivor advocates.
“Human traffickers are fast to take advantage of new applied sciences when oversight fails to maintain tempo,” the teams wrote, arguing that the invoice’s regulatory gaps might make it more durable to hint monetary flows tied to trafficking, baby exploitation, and arranged crime.
Background: What the CLARITY Act would do
H.R. 3633, the Digital Asset Market Readability Act, is essentially the most important piece of crypto laws to advance in Congress in years. The Home handed it 294-134 in July 2025. The Senate Banking Committee cleared the invoice 15-9 in Could 2026, putting it on the Senate Legislative Calendar eligible for a flooring vote.
The invoice divides oversight of digital property between the Securities and Change Fee and the Commodity Futures Buying and selling Fee, making a framework for crypto exchanges, brokers, stablecoin issuers, and DeFi members.
The Trump administration has made the laws a precedence, and crypto trade teams have pushed to maintain Part 604’s developer protections intact.
To advance within the Senate, the invoice wants 60 votes — a threshold that offers reasonable Democrats important leverage. Senators Mark Warner of Virginia and Catherine Cortez Masto of Nevada have each tied their assist to regulation enforcement’s sign-off on Part 604, making the opposition letters a direct menace to the invoice’s prospects.
Yesterday, Congress scheduled a July 17 listening to in New York on the CLARITY Act, a significant crypto market construction invoice that may divide oversight between the SEC and CFTC, as lawmakers push towards potential passage later this yr.