Latest news: The Alliance to End Human Trafficking is urging lawmakers to review Section 604 of the Clarity Act, arguing that the provision could make it more difficult to hold some 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 is language stating that developers who do not control user funds are not money transmitters.
- Boller Gosewisch argued that the provision could allow some third-party platform developers 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 outlining their concerns regarding the legislation.
- Boller Gosewisch joined Rebecca Rettig and Renato Mariotti on CoinDesk’s The Policy Protocol.
The debate: Rettig argued that Section 604 reflects longstanding 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 existing Bank Secrecy Act and FinCEN guidance.
- She argued that the bill preserves liability for parties controlling user funds and does not eliminate exposure under other criminal statutes.
- He also pointed to existing money laundering laws, including 18 USC ยง 1956, as tools that prosecutors can use against developers who knowingly facilitate criminal activity.
