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 hosted an online event Thursday with involved lawmakers continuing to advocate for support — particularly in the law enforcement community — as the bill’s supporters face a narrow window in the Senate.
Throughout the months of negotiations over the Clarity Act, provisions of the legislation that combat cryptocurrency abuse in illicit financing have remained among the top concerns of Democratic lawmakers, and a number of Democrats who worked on the bill have so far withheld their support while some law enforcement groups have been reluctant to take up the bill.
The current version recently advanced by the Senate Banking Committee is “the most highly negotiated, sophisticated bipartisan – or non-partisan – element of a regulatory framework for digital assets that has ever been presented to the public in this country,” said Sen. Cynthia Lummis, who spoke at the event. Lummis, who heads the panel’s digital assets subcommittee and was a lead Republican negotiator on the legislation, pointed out that the “current status quo is that digital asset exchanges today are subject to a bank secrecy law and lower anti-money laundering and sanctions requirements than they would be if Clarity passed.”
As supporters seek the 60 yes votes needed for the bill to pass the Senate, Lummis argued the timing is urgent.
“If we don’t get it done this year, it will probably be around 2030 before this bill can be considered again,” she said. The Senate has less than eight weeks of floor time on its calendar before the summer recess that will open the midterm election season in earnest.
Although the association produced a pro-Clarity Act letter this week from 160 former law enforcement officials and then arranged meetings for some of them with Senate lawmakers, the Revolving Door Project — an organization that targets inappropriate ties between government and corporate interests — accused the Blockchain Association of trying to “mislead senators” with its list of former officials, pointing out that many of them work for crypto companies. And the Revolving Door Project also claims that the crypto organization ignored “honest concerns expressed by the National Sheriffs’ Association and a host of other law enforcement associations 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 assuage the concerns of senators who were alerted to the Clarity Act’s flaws by real law enforcement officials,” said Jeff Hauser, executive director of the Revolving Door Project.
But Patrick Witt, the White House’s chief crypto adviser, said during Thursday’s online event: “We are imposing real regulatory constraints on businesses and players who are currently living in a state of uncertainty.”
His message to reluctant law enforcement: “You should be the biggest supporters of this bill, because that’s really what’s missing.”
Clarity advocates are walking a tightrope to insist on strong protections against illicit financing, while claiming this will not target crypto developers. Lummis said the bill “allows law enforcement to pursue bad actors who publish code with the specific intent — and this is key — with the specific intent that their code will be used to facilitate money laundering.”
Read more: Amid Clarity Act fanfare, there are concerns about how a last-minute deal could disrupt DeFi
