While there are no new signs of progress on the U.S. Senate’s Digital Asset Market Clarity Act, the crypto industry’s Blockchain Association held an online event Thursday to join lawmakers in continuing to make the case for support — particularly in the law enforcement community — as supporters of the bill struggle with a narrow Senate window.
During months of negotiations on the Clarity Act, the law’s provisions dealing with the misuse of cryptocurrencies in illicit finance have been one of the top concerns of Democratic lawmakers, and several Democrats working on the bill have so far withdrawn their support, while some law-enforcement groups are hesitant to embrace the bill.
The current version recently advanced by the Senate Banking Committee “is the most negotiated bipartisan – or non-partisan – sophisticated piece of regulatory framework for digital assets that has been presented to the public in this country,” said Senator Cynthia Loomis, who spoke at the event. Loomis, who heads the panel’s digital assets subcommittee and has been a key Republican negotiator on the legislation, highlighted that “the current situation is that digital asset exchanges are subject to fewer Bank Secrecy Act and anti-money laundering and sanctions requirements if Clarity is passed.”
As advocates are seeking the necessary 60 yes votes it will need to pass the Senate, Loomis argued the timing is urgent.
“If we don’t get it done this year, we’re probably looking at 2030 before this bill can be reconsidered,” he said. The Senate has less than eight weeks left on its calendar before summer recess, which will kick off midterm election season in full swing.
Although the association this week drafted a pro-Clarity Act letter from 160 former law enforcement officials and then organized meetings for some of them with Senate lawmakers, the Revolving Door Project – an organization that targets inappropriate relationships between government and corporate interests – accused the Blockchain Association of trying to “trick senators” with the list of former officials, revealing that many of them work for crypto companies. And the Revolving Door Project also argues that the crypto organization ignored “honest concerns expressed by the National Sheriffs’ Association and several other law enforcement unions in early May.”
“The cryptocurrency industry is so confident in its complete control of the U.S. Senate that it believes this farce is enough to allay the concerns of senators who were alerted to the Clarity Act’s flaws by actual law enforcement officials,” said Jeff Hauser, executive director of the Revolving Door Project.
But Patrick Witt, the White House’s chief adviser on crypto, said during Thursday’s online event, “We are placing real regulatory barriers on businesses and actors who currently live in a state of uncertainty.”
His message to reluctant law enforcement officers: “You should be the biggest cheerleaders for this bill, because that’s exactly what’s missing.”
Proponents of Clarity are walking a hard line, insisting on strong illicit-finance protections, while also saying it will not target crypto developers. Loomis said the bill “allows law enforcement to prosecute bad actors who publish code with the specific intent — and this is the key — with the specific intent that their code be used to facilitate money laundering.”
Read More: Amidst the Clarity Act fanfare, some are concerned about how the last-minute deal could impact DeFi