Blockchain Association Rebuts Sheriffs’ Claims as Clarity Act Deadline Looms

The Digital Asset Market Clarity Act is designed to create the first comprehensive federal framework for U.S. crypto markets, including clearer boundaries between SEC and CFTC oversight. The dispute centers on protections for developers of non-custodial software. Law enforcement groups say the language could open anti-money-laundering gaps for decentralized finance, while industry advocates argue that developers who cannot control customer assets should not be treated as money transmitters.

The National Sheriffs’ Association, representing 3,081 sheriffs, wrote to Senate Majority Leader John Thune and Democratic Leader Chuck Schumer on July 31, warning that the bill could exempt DeFi participants from KYC, AML and Bank Secrecy Act duties. The Blockchain Association rejected that characterization, saying the measure preserves prosecutions for fraud, sanctions evasion and terrorism financing while expanding compliance and information-sharing tools. The Senate faces an Aug. 8 recess deadline to begin floor action.