A coalition of four major law enforcement organizations and a separate group of nearly 100 Catholic leaders sent letters Tuesday warning that a provision in the Digital Asset Market Clarity Act would weaken the surveillance tools investigators and prosecutors rely on to fight financial crime.
The law enforcement letter, addressed to acting Attorney General Todd Blanche and Patrick Witt, executive director of the President’s Council of Digital Assets Advisors, came from the National District Attorneys Association, the National Association of Assistant United States Attorneys, the International Association of Chiefs of Police and the National Sheriffs’ Association.
Together, the groups represent more than 70,000 prosecutors, sheriffs, police chiefs, investigators and other law enforcement professionals.
Their central concern is Section 604 of the bill — a provision incorporating the Blockchain Regulatory Certainty Act, or BRCA, which would state that a developer or infrastructure provider that cannot move or control a user’s digital assets is not a money transmitter under federal law.
Supporters argue that the language is essential to protect software developers from criminal prosecution. Law enforcement groups counter that the exemptions are too broad.
“As currently drafted, Section 604 risks creating gaps in oversight and accountability that could hamper these efforts,” the groups wrote, adding that their concern is “not with individuals who simply write or publish software code, nor with responsible technological innovation,” but rather with exemptions that could protect actors who facilitate the movement of digital assets while hindering investigators.
The groups also argue that the bill falls short in terms of anti-money laundering and countering the financing of terrorism, pointing out that it does not establish suspicious activity monitoring and reporting obligations comparable to those applicable to traditional financial intermediaries. They warned that certain provisions could exempt mixers, tumblers and some decentralized finance companies from AML and know-your-customer requirements.
The second letter, sent to Senate Majority Leader John Thune and Senate Democratic Leader Charles Schumer, contained signatures from about 80 organizations and leaders, including the Alliance to End Human Trafficking, the Jesuit Conference’s Office of Justice and Ecology and dozens of Catholic sisters and survivor advocates.
“Human traffickers are quick to exploit new technologies when oversight does not keep pace,” the groups wrote, arguing that the bill’s legislative loopholes could make it harder to trace financial flows linked to human trafficking, child exploitation and organized crime.
Background: What the CLARITY Act would do
HR 3633, the Digital Asset Market Clarity Act, is the most significant piece of crypto legislation to come through Congress in years. The House passed it 294-134 in July 2025. The Senate Banking Committee approved the bill 15-9 in May 2026, placing it on the Senate legislative calendar eligible for a floor vote.
The bill splits oversight of digital assets between the Securities and Exchange Commission and the Commodity Futures Trading Commission, creating a framework for crypto exchanges, brokers, stablecoin issuers and DeFi participants.
The Trump administration has made the legislation a priority, and crypto industry groups have pushed to keep Section 604’s developer protections intact.
To advance in the Senate, the bill needs 60 votes — a threshold that gives moderate Democrats significant influence. Senators Mark Warner of Virginia and Catherine Cortez Masto of Nevada have both tied their support to law enforcement signing Section 604, making the letters of opposition a direct threat to the bill’s prospects.
Yesterday, Congress scheduled a July 17 hearing in New York on the CLARITY Act, a major crypto market structure bill that would split oversight between the SEC and CFTC as lawmakers push toward potential passage later this year.