WASHINGTON — Four major law enforcement organizations representing more than 70,000 prosecutors, sheriffs, police chiefs, investigators and other public safety professionals are urging the Trump administration to address what they describe as significant public safety concerns in pending cryptocurrency legislation.
In a letter sent to Acting Attorney General Todd Blanche and White House digital assets adviser Patrick Witt, the groups said they support efforts to establish a clear regulatory framework for digital assets but warned that portions of the proposed Digital Asset Market Clarity Act, known as the CLARITY Act, could hamper criminal investigations and create opportunities for illicit activity.
The letter was signed by:
- The National District Attorneys Association (NDAA)
- The National Association of Assistant United States Attorneys (NAAUSA)
- The International Association of Chiefs of Police (IACP)
- The National Sheriffs’ Association (NSA)
The organizations said they appreciated the opportunity to discuss the legislation with senior administration officials and acknowledged the administration’s goals of promoting innovation, technological leadership, economic growth and national security.
Key Concern Unresolved
However, the groups said a key concern remains unresolved regarding Section 604 of the legislation.
According to the letter, law enforcement officials are worried that broad exemptions contained in the provision could create gaps in oversight and accountability that sophisticated criminal organizations could exploit.
The organizations noted that criminals increasingly use digital assets in connection with a wide range of offenses, including:
- Narcotics trafficking
- Fraud schemes
- Child exploitation crimes
- Ransomware attacks
- Sanctions evasion
- Terrorism financing
- Organized retail crime
- Other forms of transnational criminal activity
‘Critical Tools’
The groups argued that existing investigative authorities and regulatory frameworks are critical tools for tracing illicit funds, identifying suspects, recovering assets for victims and prosecuting offenders.
“Our concern is not with individuals who merely write or publish software code, nor with responsible technological innovation,” the organizations wrote. “Rather, our concern is with broad exemptions that may shield individuals or entities whose activities facilitate the movement of digital assets, create obstacles to legitimate oversight, or weaken longstanding investigative and enforcement authorities relied upon by law enforcement.”
The coalition said regulatory certainty should not come at the expense of transparency, accountability, victim protection or public safety.
Other Concerns Raised
Beyond Section 604, the organizations said other provisions in the CLARITY Act could weaken anti-money laundering and counter-terrorism financing safeguards that investigators rely on to identify criminal activity and protect national security.
Among the concerns cited in the letter:
- Potential reductions in transparency and accountability requirements.
- The absence of what the groups described as a comprehensive set of safeguards commonly applied to traditional financial intermediaries.
- A lack of suspicious activity monitoring and reporting requirements comparable to those used elsewhere in the financial system.
- Provisions that could exempt certain participants, including cryptocurrency mixers, tumblers and some decentralized finance, or DeFi, businesses, from regulatory obligations.
No Blanket Exemptions
The organizations argued that no category of market participant should receive blanket exemptions from registration, know-your-customer requirements, the Bank Secrecy Act or anti-money laundering and counter-terrorism financing rules.
The coalition said the broad range of organizations signing the letter — representing federal prosecutors, state prosecutors, sheriffs, police chiefs and criminal investigators — demonstrates what it characterized as a strong consensus within the law enforcement community about the legislation’s potential public safety implications.
