Blockchain Association Pushes Back Against CLARITY Act Criticism
The Blockchain Association has responded to criticism from the National Sheriffs' Association regarding the CLARITY Act, which is currently pending in the Senate. The sheriffs' group had claimed that the bill would weaken efforts to fight financial crime by creating broad exemptions for decentralized finance (DeFi), crypto mixers, and cross-chain bridges.
In a letter sent on August 3, the Blockchain Association defended the CLARITY Act, stating that it does not create a blanket exemption for DeFi. Instead, the association argued that the bill requires any company or platform that controls customer funds to follow Bank Secrecy Act (BSA) rules, anti-money laundering laws, and sanctions requirements.
The association also pointed out that the bill includes $3 billion in funding to help state and local law enforcement investigate crypto-related crimes. The main disagreement centers on Section 10604, also known as the Blockchain Regulatory Certainty Act (BRCA), which protects non-custodial blockchain developers from being treated as money transmitters.
The Blockchain Association's executive director, Summer Mersinger, said that the bill keeps a clear line between financial services and software development, while still protecting consumers. The association's letter comes at a critical time, as Congress is set to begin its summer recess on August 7, giving lawmakers only a few days to act on the CLARITY Act.
The delay has hurt market confidence, with Kalshi predicting that the chances of the CLARITY Act becoming law in 2026 have dropped to around 36%.