Although there are no new signs of progress on the US Senate’s Digital Asset Market Clarity Act, the crypto industry’s Blockchain Association held an online event on Thursday in which lawmakers involved continued to advocate for support, especially in the law enforcement community, as proponents of the bill face a narrow Senate window.
Throughout the months of Clarity Act negotiations, the legislation’s provisions combating the abuse of cryptocurrencies in illicit finance have remained among the top concerns of Democratic lawmakers, and several Democrats who have worked on the bill so far have withheld their support, while some law enforcement groups have been reluctant to take up the bill.
The current version recently presented by the Senate Banking Committee is “the most sophisticated bipartisan – or non-partisan – piece of a regulatory framework for digital assets that has ever been presented to the public in this country,” said Senator Cynthia Lummis, who spoke at the event. Lummis, who heads the panel’s digital assets subcommittee and has been a leading Republican negotiator on the legislation, noted that “the current status quo is that digital asset exchanges are subject to lower Bank Secrecy Act and sanctions and anti-money laundering requirements than they would be if Clarity were passed.”
As advocates seek the 60 votes in favor needed to pass the Senate, Lummis argued that the moment is urgent.
“If we don’t get it done this year, we’ll probably see around 2030 before this bill can have a chance to be considered again,” he said. The Senate has less than eight weeks of time available on its calendar before the summer break that will kick off the midterm election season in earnest.
Although the association produced a pro-Clarity Act letter from 160 former law enforcement officials this week and later arranged 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 “mislead senators” with its list of former officials, noting that many of them work for crypto companies. And the Revolving Door Project also maintains that the crypto organization ignored “the honest concerns expressed by the National Sheriffs Association and a number of other law enforcement associations in early May.”
“The cryptocurrency industry is so confident in its complete control over the US Senate that it believes this charade is enough to assuage the concerns of senators who were alerted to the Clarity Act’s flaws by law enforcement officials,” said Jeff Hauser, executive director of the Revolving Door Project.
But Patrick Witt, senior White House advisor on crypto, said during Thursday’s online event: “We are imposing real regulatory restrictions on companies and actors that are currently living in a state of uncertainty.”
His message to reluctant law enforcement officials: “You should be the biggest supporters of this bill, because this is really what’s missing.”
Clarity advocates are walking a tightrope by insisting on strong protections against illicit finance while saying it won’t target cryptocurrency developers. Lummis said the bill “allows authorities to prosecute bad actors who release code with the specific intent – and that’s the key – with the specific intent that their code will be used to facilitate money laundering.”
Read more: Amid the Clarity Act fanfare, there is some concern about how a last-minute deal could impact DeFi
