NSA Warns Senate: CLARITY Act Exemptions Put Law Enforcement at Risk
The National Sheriffs' Association (NSA) has sent a warning letter to Senate Majority Leader John Thune and Minority Leader Charles Schumer, signed by NSA President Sheriff Troy Wellman and Executive Director Justin Smith. The letter represents 3,081 elected sheriffs and approximately 10,000 public safety professionals across the U.S.
The association is concerned about the CLARITY Act, which would establish a regulatory framework for digital assets. However, the NSA wants significant changes before the Senate votes, citing that the bill 'would create broad exemptions from registration, know-your-customer, anti-money laundering, and sanctions-law requirements' for certain decentralized-finance participants.
The NSA takes particular issue with Section 604, which would exempt non-controlling developers and DeFi protocol participants from AML obligations. The association argues that this blanket exemption would cover mixers, tumblers, and cross-chain bridges, which exist specifically to obscure transaction trails.