70,000 Law Enforcers Urge Changes to CLARITY Act

On June 23, more than 70,000 U.S. law enforcement professionals asked federal officials to revise the Digital Asset Market Clarity Act, saying Section 604’s broad exemptions could shield market participants from registration and oversight and create gaps in investigations.

The letter was signed by leaders of the National District Attorneys Association, the National Association of Assistant United States Attorneys, the International Association of Chiefs of Police and the National Sheriffs’ Association. The groups represent prosecutors, sheriffs, police chiefs, criminal investigators and other officers nationwide. The letter was addressed to Acting Attorney General Todd Blanche and Patrick J. Witt, executive director of the President’s Council of Advisors for Digital Assets, and thanked the Administration for engagement while saying key concerns remain unresolved.

Signers focused on Section 604, arguing the provision could exempt individuals or entities that facilitate digital-asset transactions from registration and oversight requirements. The letter clarifies the concern is not directed at people who merely write or publish software code but opposes categorical exemptions that remove investigative access to financial information.

The organizations said digital assets increasingly appear in investigations of narcotics trafficking, fraud, child exploitation, ransomware, sanctions evasion, terrorism financing and organized retail crime.

The letter noted existing authorities and rules — Bank Secrecy Act obligations, know-your-customer requirements and anti-money-laundering and countering the financing of terrorism safeguards — help investigators follow transaction trails, identify suspects, recover illicit proceeds and return funds to victims.

The organizations wrote: “No class of market participant should receive a blanket exemption from registration, know-your-customer (KYC), Bank Secrecy Act (BSA), or AML/CFT requirements.” The coalition singled out mixers, tumblers and certain decentralized finance businesses as services that can be used to move or conceal illicit funds and said those services should not be excluded from compliance rules applied to other financial intermediaries.

The groups urged continued engagement with the Administration, Congress and industry stakeholders to refine the CLARITY Act so it preserves transparency, accountability and investigative authorities while allowing responsible innovation. The coalition did not oppose the bill outright but called for revisions to address law enforcement concerns.

The Consumer Technology Association, which represents more than 1,200 technology companies, has urged Senate leaders to advance the CLARITY Act to provide clearer rules for digital-asset markets.