Industry pushes law enforcement angle as Senate negotiations intensify on digital asset bill
The Blockchain Association is staging an aggressive push this week to convince Senate lawmakers that the Digital Asset Market Clarity Act contains strong law enforcement tools to combat cryptocurrency-related illicit finance, as negotiations over the bill’s bad-actor provisions intensify ahead of a compressed legislative calendar.
The industry group held an online town hall on Thursday and has produced a letter signed by 160 former law enforcement officials backing the bill. The move comes as Senate Banking Committee negotiations continue over provisions that have become a flashpoint between Democrats and Republicans, with fewer than eight weeks of floor time available before a summer break that will begin the midterm elections season.
“The most highly negotiated bipartisan, or nonpartisan, sophisticated piece of a regulatory framework for digital assets that’s ever been presented to the public in this country,” Senator Cynthia Lummis, the Republican negotiator who heads the Banking Committee’s digital assets subcommittee, said of the bill.
Lummis emphasized the urgency. “If we don’t get it done this year, we’re probably looking at about 2030 before this bill could ever have a shot again of being considered,” she said.
On the illicit finance question specifically, Lummis argued the current version strengthens enforcement authority. “Digital asset exchanges are subject to lower Bank Secrecy Act and anti-money laundering and sanctions requirements today than they would be if Clarity passes,” she said. She also highlighted a provision addressing code developers: “Allows law enforcement to prosecute bad actors who publish code with the specific intent, and that’s the key, with the specific intent that their code be used to facilitate money laundering.”
Patrick Witt, White House chief adviser on crypto, framed the bill as imposing genuine regulatory discipline. “We’re putting real regulatory constraints on businesses and actors that currently live in a state of uncertainty,” Witt said. “You should be the biggest cheerleaders for this bill, because this is really what is missing.”
The law enforcement letter strategy has drawn sharp criticism from the Revolving Door Project, an organization that monitors improper ties between government and corporate interests. Executive director Jeff Hauser accused the Blockchain Association of attempting to “hoodwink senators,” pointing out that many signatories work for crypto companies.
“The cryptocurrency industry is so assured of its complete control over the U.S. Senate that it believes this farce is sufficient to assuage the concerns of senators who were alerted to the flaws of the Clarity Act by actual law enforcement officials,” Hauser said.
The Revolving Door Project contends the Blockchain Association disregarded concerns expressed by the National Sheriffs’ Association and other law enforcement associations in early May. The bill requires 60 votes to pass the Senate.
The illicit finance treatment remains one of the top points of contention in ongoing committee negotiations. Democratic lawmakers have expressed concerns about the bill’s cryptocurrency abuse provisions, and some law enforcement groups have been hesitant to embrace the measure. The current version recently advanced by the Banking Committee continues to be refined as lawmakers seek consensus before the legislative window closes.
