The Federal Law Enforcement Officers Association expressed support for the CLARITY Act but urged changes to the legislation’s language.
Update, July 14, 1:09 pm UTC: This article was updated to include comments from Blockchain Association chief policy officer Lindsay Fraser.
The Digital Asset Market Clarity Act has secured its second public endorsement from a major US law enforcement organization, coming just weeks before what many see as a make-or-break legislative deadline before the Senate’s August recess.
In a July 10 statement, the Federal Law Enforcement Officers Association (FLEOA) said it submitted a letter to the US Senate Banking Committee endorsing the CLARITY Act, while calling for changes to strengthen accountability in decentralized finance (DeFi) and preserve investigators’ existing powers.
Blockchain Association chief policy officer Lindsay Fraser said the endorsement was significant because the FLEOA “represents more than 30,000 federal officers who understand firsthand what investigators need to combat sophisticated financial crime.” She said the letter supported the case that the CLARITY Act would “expand Anti-Money Laundering tools, improve information sharing and preserve longstanding criminal authorities.”
The endorsement came nine days after the bill was backed by the National Organization of Black Law Enforcement Executives (NOBLE), with both letters helping counter arguments that the CLARITY Act would weaken the government’s ability to police crypto crime.
In its statement, the FLEOA said the current version of the CLARITY Act “represents meaningful progress toward balancing technological innovation with public safety.”
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“FLEOA commends the Committee for its efforts to establish a clear regulatory framework for digital assets that promotes responsible innovation while preserving critical criminal, anti-money laundering, counterterrorism financing, sanctions enforcement, and investigative authorities.”
However, the FLEOA also urged lawmakers to narrow the CLARITY Act’s DeFi protections; make it clearer who is accountable in decentralized finance (DeFi) systems; stop firms from avoiding regulation by claiming to be decentralized; revise “specific intent” language to make it easier to establish liability and explicitly affirm that the legislation doesn’t limit existing federal investigative authority.
Fraser said the Blockchain Association welcomed “constructive, technically sound refinements” to the legislation, but cautioned that any changes should preserve the distinction between criminal conduct and the development of noncustodial software.
“Protecting developers and preserving law enforcement tools are complementary goals, and FLEOA’s support shows the Senate can get that balance right,” Fraser said.
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