Blockchain Association Rebuts Sheriffs' CLARITY Act Objections

The Crypto Industry Rebuttal to Sheriffs' CLARITY Act Objections

On August 3, the Blockchain Association submitted an eight-page letter to Senate Majority Leader John Thune and Minority Leader Chuck Schumer in response to a July 31 warning from the National Sheriffs' Association (NSA) regarding the Digital Asset Market Clarity Act. The NSA argued that Section 10604 of the bill would create broad carve-outs for DeFi protocols, crypto mixers, and cross-chain bridges from anti-money-laundering requirements.

The Blockchain Association countered that the sheriffs had misconstrued the legislation, stating that it regulates intermediaries based on the control they exercise over funds. The association argued that the bill makes clear that developing neutral software or providing infrastructure does not turn someone into a regulated actor.

A divided law-enforcement field has emerged, with several groups now backing the current version of the bill, including the Fraternal Order of Police and the Major Cities Chiefs Association. However, the NSA and other groups have raised concerns over state enforcement and conflicts of interest.