Crypto Clarity Act in spotlight for bad-actor provisions as Senate process grinds forward

Policy Share Share this article Copy link X icon X (Twitter) LinkedIn Facebook Email Crypto Clarity Act in spotlight for bad-actor provisions as Senate process grinds forward The industry has been trying to make a case this week the Clarity Act provides law enforcement strong tools to combat illicit finance involving cryptocurrency. By Jesse Hamilton | Edited by Nikhilesh De Jun 4, 2026, 7:41 p.m. 3 min read Make preferred on U.S. Senator Cynthia Lummis is among those trying to assure law enforcement officials that the Clarity Act provides tough crypto powers. (Jesse Hamilton/CoinDesk) What to know : The Blockchain Association assembled an online "town hall" to underline the industry's position that the crypto market structure bill is good for law enforcement purposes. The Clarity Act's treatment of illicit finance protections has long been one of the top points of negotiation between Democrats and Republicans, and those final points must be ironed out if the Senate has a chance of passing the bill in the next two months. Though there's no new sign of progress on the U.S. Senate's Digital Asset Market Clarity Act, the crypto industry's Blockchain Association held an online event Thursday with involved lawmakers continuing to make the case for support — especially in the law enforcement community — as the bill's advocates contend with a narrow Senate window . Throughout the months of Clarity Act negotiations, the legislation's provisions that contend with cryptocurrency abuse in illicit finance have remained among the top concerns of Democratic lawmakers, and a number of Democrats who've worked on the bill have so far held back their support while some law-enforcement groups have been hesitant to embrace the bill. The current version recently advanced by the Senate Banking Committee is "the most highly negotiated bipartisan — or nonpartisan — sophisticated piece of a regulatory framework for digital assets that's ever been presented to the public in this country," said Senator Cynthia Lummis, who spoke at the event. Lummis, who heads the panel's digital assets subcommittee and has been a leading Republican negotiator on the legislation, highlighted that the "current status quo is that digital asset exchanges are subject to lower Bank Secrecy Act and anti-money laundering and sanctions requirements today than they would be if Clarity passes." As advocates seek the necessary 60 yes votes it'll need to pass the Senate, Lummis argued that the timing is urgent. "If we don't get it done this year, we're probably looking at about 2030 before this bill could ever have a shot again of being considered," she said. The Senate has fewer than eight weeks of floor time available on its calendar before a summer break that will begin the midterm elections season in earnest. Though the association produced a pro-Clarity Act letter from 160 former law enforcement officials this week and then set up meetings for some of them with Senate lawmakers, the Revolving Door Project — an organization that targets improper ties between the government and corporate interests — accused the Blockchain Association of trying to "hoodwink senators" with its list of former officials, pointing out many of them work for crypto companies. And the Revolving Door Project also contends the crypto organization disregarded "honest concerns expressed by the National Sheriffs’ Association and a host of other law enforcement associations in early May." "The cryptocurrency industry is so assured of its complete control over the U.S. Senate that it believes this farce is sufficient to assuage the concerns of senators who were alerted to the flaws of the Clarity Act by actual law enforcement officials," said Jeff Hauser, the Revolving Door Project's executive director. But Patrick Witt, the White House's chief adviser on crypto, said during Thursday's online event, "We're putting real regulatory constraints on businesses and actors that currently live in a state of uncertainty." His message to reluctant law enforcement officials: "You should be the biggest cheerleaders for this bill, because this is really what is missing." Clarity proponents are walking a tightrope to insist on strong illicit-finance protections while also saying it won't target crypto developers. Lummis said the bill "allows law enforcement to prosecute bad actors who publish code with the specific intent — and that's the key — with the specific intent that their code be used to facilitate money laundering." Read More: Amid the Clarity Act fanfare is some worry over how a last-minute deal may punch DeFi Clarity Act Regulation More For You OCC chief says Democrats applying sole political pressure in World Liberty charter choice By Jesse Hamilton | Edited by Nikhilesh De 1 hour ago The regulator rejected claims he's doing President Trump's bidding during a congressional hearing that also addressed the GENIUS Act stablecoin push. What to know : The House Financial Services Committee held a hearing with banking regulators that delved into stablecoin rules and the controversial bank-charter application from World Liberty Financial, the crypto firm tied to President Donald Trump and his family. Jonathan Gould, the head of the Office of the Comptroller of the Currency, rejected... 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