A coalition of four major law enforcement organizations and a separate group of nearly 100 Catholic leaders sent letters on Tuesday warning that a provision in the Digital Asset Market Clarity Act would weaken controls that investigators and prosecutors rely on to fight financial crimes.
law enforcement message, Directed To Acting Attorney General Todd Blanche and Patrick Witt, Executive Director of the President’s Council of Advisors on Digital Assets, came from the National Association of District Attorneys, the National Association of Assistant U.S. Attorneys, the International Association of Chiefs of Police, and the National Association of Sheriffs.
Together, these groups represent more than 70,000 prosecutors, sheriffs, police chiefs, investigators and other law enforcement professionals.
Their main concern is Section 604 of the bill — a provision that includes the Blockchain Regulatory Certainty Act, or Barcawhich would prove that a developer or infrastructure provider that cannot transfer or control a user’s digital assets is not a money transmitter under federal law.
Supporters say the language is necessary to protect software developers from criminal prosecution. Law enforcement groups counter that the exemptions are too broad.
“As currently drafted, Section 604 risks creating oversight and accountability gaps that could hamper these efforts,” the groups wrote, adding that their concern “is not with individuals who merely write or publish code, nor with responsible technological innovation,” but with exemptions that could protect actors who facilitate the movement of digital assets while obstructing investigators.
The groups also assert that the draft law does not meet anti-money laundering and counter-terrorism financing requirements, noting that it does not provide for obligations to monitor and report suspicious activities similar to those applied to traditional financial intermediaries. They warned that some provisions could exempt mixers, tumblers and some DeFi companies from anti-money laundering and “know your customer” requirements.
The other letterIt was sent to Senate Majority Leader John Thune and Senate Democratic Leader Charles Schumer, and carried signatures from about 80 organizations and leaders, including the Alliance to End Human Trafficking, the Jesuit Conference’s Office of Justice and Environment, and dozens of Catholic sisters and survivor advocates.
“Human traffickers are quick to exploit new technologies when oversight fails to keep pace,” the groups wrote, arguing that regulatory loopholes in the bill could make it difficult to track financial flows linked to trafficking, child exploitation and organized crime.
Background: What the Clarity Act would do
H.R. 3633, the Digital Asset Market Clarity Act, is the most significant cryptocurrency legislation introduced in Congress in years. the house Pass This was achieved by a vote of 294-134 in July 2025. The Senate Banking Committee approved the bill by a vote of 15-9 in May 2026, making it on the Senate legislative calendar eligible for a vote.
The bill splits oversight of digital assets between the Securities and Exchange Commission and the Commodity Futures Trading Commission, creating a framework for cryptocurrency exchanges, brokers, stablecoin issuers, and DeFi participants.
The Trump administration has made legislation a priority, and cryptocurrency industry groups have pushed to keep Section 604 developer protections intact.
To advance in the Senate, the bill needs 60 votes — a threshold that gives moderate Democrats significant influence. Sens. Mark Warner of Virginia and Catherine Cortez Masto of Nevada have both tied Their support for law enforcement signing Section 604 makes opposition messages a direct threat to the bill’s prospects.
Yesterday Congress The decision A July 17 hearing in New York on the CLARITY Act, a major cryptocurrency market structure bill that would split oversight between the SEC and CFTC, as lawmakers push toward possible passage later this year.
