BPI Slams CLARITY Act as 'Illicit Finance-Friendly'

The Bank Policy Institute (BPI) has criticized the proposed CLARITY Act, calling it 'illicit finance-friendly' in a policy update published on June 19.

The BPI argues that the bill would create a 'lighter-touch AML regime' by only applying anti-money laundering obligations to certain digital asset brokers, dealers, and exchanges, leaving other parts of the crypto ecosystem outside the framework.

BPI warns that decentralized finance providers, unhosted wallets, and certain digital asset service providers would remain beyond the scope of Bank Secrecy Act obligations under the current framework.

The group argues that this could make parts of the crypto ecosystem more attractive to illicit actors seeking to avoid law enforcement scrutiny.