While there is no new sign of progress on the US Senate’s Digital Asset Market Clarity Act, the crypto industry’s Blockchain Association held an online event Thursday with involved lawmakers continuing to argue for support — particularly in the law enforcement community — as the bill’s proponents grapple with a tight Senate window.
Throughout the months of Clarity Act negotiations, the legislation’s provisions fighting cryptocurrency abuse in illicit financing have remained among the top concerns of Democratic lawmakers, and a number of Democrats who have worked on the bill have so far withheld 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 negotiated bipartisan — or nonpartisan — sophisticated piece of a digital asset regulatory framework that has ever been presented to the public in this country,” said Sen. Cynthia Lummis, who spoke at the event. Lummis, who chairs 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 requirements and penalties today than they would be if Clarity passes.”
As proponents seek the necessary 60 yes votes to pass the Senate, Lummis argued the timing is urgent.
“If we don’t get it done this year, we’re probably looking at about 2030 before this bill can ever have a chance to be considered,” she said. The Senate has less than eight weeks of floor time available on its calendar before a summer break that begins the midterm election season in earnest.
Although the association drafted a 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 government and corporate interests — accused the Blockchain Association of trying to “shut down senators” with its list of former officials that singles out many of those working for encryption. And the Revolving Door Project also claims that the crypto organization ignored “honest concerns expressed by the National Sheriff’s Association and a number of other law enforcement associations in early May.”
“The cryptocurrency industry is so confident of its complete control of the US Senate that it believes this farce is sufficient to assuage the concerns of senators who were warned about the flaws in 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 crypto adviser, said during Thursday’s online event: “We are putting real regulatory constraints on companies and actors who are currently living in a state of uncertainty.”
His message to reluctant law enforcement officials: “You should be the biggest cheerleaders for this bill, because that’s really what’s missing.”
Clarity supporters are walking a tightrope to insist on strong protections against illegal financing, while also saying it will not target crypto developers. Lummis said the bill “allows law enforcement to prosecute bad actors who release 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: Amid Clarity Act fanfare, some worry about how last-minute deal could hit DeFi
