Security Veterans Demand Senate Pass CLARITY Act

Security Veterans Urge Senate to Advance Crypto Illicit Finance Bill

More than 160 former national security, intelligence, and law enforcement officials are pressing the U.S. Senate to advance the CLARITY Act, asserting that its passage would bolster efforts to combat illicit finance within the cryptocurrency sector.

The appeal, coordinated by the Blockchain Association, was formalized in a letter addressed to Senate Majority Leader John Thune and Democratic Leader Chuck Schumer. The industry group announced the initiative on X, emphasizing that the structure of the digital asset market is a “law enforcement and national security priority.” The letter argues that as cryptocurrency activity continues its global expansion, it is imperative for the United States to establish a regulatory and oversight framework for the industry.

According to the signatories, a failure to do so risks pushing more activity offshore into less transparent markets, making them more difficult for U.S. authorities to monitor and investigate. This, they warn, creates vulnerabilities that can be exploited for illicit financial activities.

“It is critical for the United States that this activity occurs under American rules, with American oversight, and subject to American Law,” the letter states.

The former officials contend that enacting the CLARITY Act would enhance national security, improve the visibility of law enforcement operations, and equip investigators with more robust tools to combat financial crime. This, in turn, would make it more challenging for criminal networks to launder money, circumvent sanctions, and engage in fraud.

Data from the Bank Policy Institute (BPI) indicates a significant surge in illicit crypto flows, which rose by 162% year-on-year last year. The BPI also clarified that the CLARITY Act is not a deregulatory measure but rather aims to strengthen enforcement, enhance compliance accountability, and foster better coordination across digital asset markets.

The proposed legislation would extend the Bank Secrecy Act, imposing compliance requirements on digital commodity brokers, dealers, and exchanges. It would also mandate anti-money laundering obligations, along with reporting and monitoring requirements. Furthermore, the bill includes a Treasury-led pilot program for information sharing among agencies such as the Department of Justice (DOJ), the Federal Bureau of Investigation (FBI), and the Drug Enforcement Administration (DEA). It also proposes a permanent interagency working group dedicated to counter-illicit finance initiatives.

The Blockchain Association announced that its members and other industry participants are scheduled to visit Washington, D.C., for a series of meetings across 18 Senate offices. The group is also planning a virtual town hall later this week to discuss the CLARITY Act’s contributions to law enforcement and national security efforts. Expected attendees include Senator Cynthia Lummis, House Majority Whip Tom Emmer, and Patrick Witt.

The letter concludes with a direct call for the Senate to pass the CLARITY Act. The bill has recently received approval from the Senate Banking Committee but is encountering significant opposition from some lawmakers and banking industry representatives.