The Blockchain Association told Senate leaders Monday that the National Sheriffs' Association misread how the Clarity Act treats decentralized finance, pushing back on the sheriffs' group's concerns that the bill would weaken the fight against financial crime. The rebuttal lands in the bill's final stretch before the Senate breaks for its August recess.
The Blockchain Association sent a letter to Senate Majority Leader John Thune and Minority Leader Chuck Schumer on Monday, countering the National Sheriffs' Association's claim that the Clarity Act would make it harder to police financial crime. The crypto industry group said the sheriffs' association misconstrued the bill's approach to regulating decentralized finance. The exchange comes as the Clarity Act enters a pivotal week in the Senate, which is set to leave for recess Friday and then turn to November's elections, leaving little time to pass the bill this year.
What the sheriffs' group objected to
Last week, the National Sheriffs' Association, which represents over 3,000 sheriffs and 10,000 public safety officials, sent its own letter to Thune and Schumer arguing the bill's carve-outs on anti-money laundering, sanctions law and know-your-customer rules were too broad. The group said the Clarity Act would exempt DeFi protocols from AML rules and argued lawmakers should regulate every entity in the industry rather than grant a blanket exemption to any of them. The Blockchain Association countered that the bill imposes "rigorous obligations" on intermediaries while still giving law enforcement tools to fight financial crime.
The fight over the safe harbor
The sheriffs' association singled out Section 10604, known as the Blockchain Regulatory Certainty Act, which creates a safe harbor for non-custodial developers and clarifies that they are not money transmitters. It asked lawmakers to delete or narrow the section.
Lindsay Fraser, the Blockchain Association's chief policy officer, said the bill preserves a line between financial intermediation and neutral software development. The industry group also pointed to a letter signed last month by 160 former law enforcement and national intelligence officials urging Thune and Schumer to advance the Clarity Act, arguing that letter undercuts any claim that the sheriffs' position reflects a consensus across law enforcement.
A final week under pressure
Thune has not set a date for the procedural vote required before the Senate can advance the bill, though he told Bloomberg Monday that he still expects that initial vote to happen before recess. Ethics language remains a separate sticking point: Democrats have demanded stronger provisions addressing Trump's crypto interests, including a memecoin he launched before Inauguration Day and his family's involvement in World Liberty Financial. Financial disclosures released last month showed Trump received millions of dollars tied to WLF.
New bipartisan ethics language was sent to the White House last week, but no deal had been reached as of Monday afternoon. Fraser said the Blockchain Association's letter is meant to close out other outstanding issues so the bill is ready to move once an ethics deal is reached.
Source: The Block
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