US Crypto Clarity Act faces law‑enforcement criticism over AML gaps

The Digital Asset Market Clarity Act, known as the Clarity Act, seeks to place the United States' cryptocurrency sector under a single federal regulatory framework, classifying Bitcoin and Ethereum as digital commodities overseen by the CFTC and assigning securities‑like assets to the SEC. The bill cleared the Senate Banking Committee on May 14, 2026, and includes provisions that would enhance Bank Secrecy Act obligations and promote agency information sharing.

Four law‑enforcement groups, including the National Sheriffs’ Association, have warned that the Act’s safe‑harbor provisions could exempt developers of decentralized‑finance tools from liability, creating blind spots that sophisticated criminal actors could exploit for money‑laundering, ransomware financing and other illicit activities. The groups sent letters to lawmakers in May and met with the White House during the week of June 9, 2026, urging stronger safeguards.

Industry representatives, such as the Blockchain Association and Coinbase, argue the legislation strengthens oversight, eliminates regulatory uncertainty, and brings most automated trading protocols under traditional AML rules. The debate centres on whether the safe‑harbor language will remain intact or be narrowed, a decision that could shape the future of U.S. crypto markets and compliance practices.