Law Enforcement Groups Oppose Blockchain Developer Exemption in CLARITY Act

The CLARITY Act's Blockchain Developer Exemption Sparks Law Enforcement Concerns

A coalition of major law enforcement organizations has urged the Trump administration to reconsider a key provision in the CLARITY Act, citing oversight and anti-money laundering concerns. The provision, Section 604, would shield blockchain developers and certain non-custodial infrastructure providers from being treated as money transmitters.

The letter, signed by four law enforcement groups, including the National Sheriffs' Association and the International Association of Chiefs of Police, argues that the provision could create gaps in accountability and hinder investigations into illicit activity. The group also expressed concerns that it could exempt some crypto participants from certain know your customer (KYC) and anti-money laundering (AML) reporting requirements.

However, not all law enforcement groups agree on this issue. The Grand Lodge Fraternal Order of Police (GLFOP) and the National Association of Police Organizations (NAPO), two major law enforcement groups involved in discussions about the legislation, did not sign the letter.