- The White House is expected to meet with representatives of law enforcement as administration officials continue their efforts to help advance the Senate's crypto market structure bill.
- The Clarity Act's legal protections for crypto developers have drawn criticism from law enforcement groups, while the industry argues that the bill provides a number of new tools and its absence would leave crime fighters in limbo.
The White House has invited law enforcement organizations objecting to the language of the U.S. Senate's crypto market structure bill to sit down for a meeting on Monday, according to a person briefed on the plan, which is meant to iron out objections over the way the legislation protects against illicit finance.
The tension is focused on the Digital Asset Market Clarity Act's section known as the Blockchain Regulatory Certainty Act (in reference to an earlier legislative effort). That section (604) seeks to ensure that software developers who don't mean to ultimately control the tools they're enabling can't be held legally responsible as "money transmitters" — considered a vital protection for developers to continue creating decentralized finance (DeFi) projects.
Groups such as the National Sheriffs Association have said they have significant concerns with the language, despite other law enforcement officials voicing some support.
"No good reason supports giving mixers, tumblers, and DeFi a blanket exemption," the sheriffs' group said in a May letter to the leaders of the Senate Banking Committee. "While some software developers are not engaged in money transmitting or other activity that should subject them to BSA regulation, plenty of others are."
White House officials — especially lead crypto adviser Patrick Witt — have sought to keep the Clarity Act moving forward in the Senate, including holding previous meetings with those who have objected, such as law enforcement groups and Wall Street bankers. Representatives of the White House didn't immediately respond to requests for comment on the expected Monday meeting, which meant to work through some of the remaining concerns, and few details were available.
Industry groups such as the Blockchain Association have defended the legislation's crime-fighting tools, arguing that the bill includes a number of new powers for pursuing bad actors, and that the absence of a new law will leave a vacuum.
At an industry-hosted event earlier this month, White House adviser Witt said, "We're putting real regulatory constraints on businesses and actors that currently live in a state of uncertainty."
To law enforcement officials, he argued, "You should be the biggest cheerleaders for this bill, because this is really what is missing."
Meanwhile, the Clarity Act's political opponents, such as Senator Elizabeth Warren — the top Democrat on the Banking Committee, have maintained a steady stream of criticism on the legislation's illicit-finance front. They routinely cite crypto's use by criminal groups, drug cartels and human traffickers.
Senate Majority Leader John Thune has reportedly said he's looking at bringing the Clarity Act to the Senate floor in the coming weeks, despite the ongoing debate over a number of high-profile provisions. Punchbowl news reported Monday that he may bring the bill up for a vote whether Democrats are ready or not.
Banking Committee Chairman Tim Scott posted on social media site X on Monday that the Senate "should vote on crypto market structure legislation in July."
However, the bill would need 60 yes votes to ultimately pass in the Senate, meaning it'll need a significant number of Democrats to come aboard, and there are only about four weeks of Senate floor time remaining before the summer break. At the moment, the discussions continue over the BRCA, bringing the Commodity Futures Trading Commission up to full strength and an ethics provision that would ban senior government officials (such as the president) from personal interests in the crypto sector.
Multiple lawmakers have said they won't vote for the bill without ensuring it addresses that potential conflict of interest for government officials, including the only Democrats who voted for the bill in the Senate Banking Committee's markup.
Also, Congress has been embroiled in President Donald Trump's refusal to sign a major housing affordability bill sent to his desk. Trump had said he won't sign any legislation until lawmakers approve a voter-identification bill that would demand significant efforts for voters to prove their citizenship. It's unclear whether his refusal might also extend to the Clarity Act, but the housing bill was set to be formally sent to him on Monday and will test how much his resistance may or may not matter, depending on whether he lets the constitutional 10-day window automatically approve the bill without his signature.
Jaret Seiberg, a policy analyst for TD Cowen, said in a note on Monday that he'd "expect the housing bill to become law despite Trump last week canceling the signing ceremony," adding that it's unlikely Trump would veto the major legislation. "By our count, that means the bill becomes law on Friday, July 10, unless the President vetoes it or signs it into law earlier."
Read More: In Clarity Act's final weeks, its path through U.S. Senate not getting much clearer
