Latest developments: The Alliance to End Human Trafficking is urging lawmakers to revisit Section 604 of the Clarity Act, arguing that the provision could make it more difficult to hold certain crypto platform developers accountable when their technology is used to facilitate human trafficking.
- Katie Boller Gosewisch, executive director of the Alliance to End Human Trafficking, said her organization’s main concern was the language that developers who do not control user funds are not money transmitters.
- Boller Gosewisch argued that this provision could allow some developers of third-party platforms to “hide behind” a lack of liability if their software is used to facilitate traffic-related payments.
- The Alliance and Catholic Charities recently sent a letter to Senate Majority Leader John Thune and Senate Minority Leader Chuck Schumer expressing concerns about the legislation.
- Boller Gosewisch joined Rebecca Rettig and Renato Mariotti on CoinDesk’s The Policy Protocol.
The debate: Rettig argued that Section 604 reflects long-standing U.S. anti-money laundering policy rather than creating a new legal shield.
- Rettig said the provision simply clarifies that developers who do not control customer assets are not considered money transmitters, consistent with the applicable Bank Secrecy Act and FinCEN guidelines.
- She argued that the bill preserves liability for parties that control user funds and does not eliminate risks under other criminal laws.
- She also highlighted existing money laundering laws, including 18 USC § 1956, as tools prosecutors can use against developers who knowingly facilitate criminal activity.
