CLARITY Act Odds Fall To 41% As White House Receives Letter Opposing Key Provisions
Within just a day, the odds of the CLARITY Act approval fell to 41% on Polymarket, down from 55%. The drop came after the White House received a letter from key U.S. law enforcement groups expressing major concerns with certain provisions that could make it difficult to regulate illicit practices in the crypto market.
The letter, dated June 23 and sent to Acting Attorney General Todd Blanche and White House crypto advisor Patrick Witt, was signed by leaders of the National District Attorneys Association (NDAA), National Association of Assistant U.S. Attorneys (NAAUSA), International Association of Chiefs of Police (IACP), and the National Sheriffs’ Association. It represents over 70,000 law enforcement professionals.
The groups stated they support a regulatory framework for digital assets but noted that certain aspects of the CLARITY Act could undermine financial crime-fighting efforts, including oversight and enforcement tools. They specifically highlighted concerns with the Blockchain Regulatory Certainty Act (BRCA), which offers developer protections, and Section 604 of the CLARITY Act.
“Since concerns regarding Section 604 first emerged earlier this year, our organizations have engaged constructively with lawmakers, Administration officials, and stakeholders regarding its potential impact on public safety and criminal enforcement,” the letter stated. The organizations argued that broad exemptions could create gaps in oversight and accountability that sophisticated criminal actors may exploit.
The letter noted that digital assets are used in various criminal activities such as fraud, ransomware attacks, sanctions violations, drug trafficking, child exploitation, money laundering, and organized retail crime. The groups cautioned that Section 604 risks creating gaps in oversight and accountability for investigations and prosecutions.
They also raised concerns about provisions that could reduce transparency and create weak points in anti-money laundering (AML) and counter-terrorism financing systems. In particular, they highlighted clauses that could exclude participants like mixers, tumblers, and some decentralized finance (DeFi) enterprises from regulatory requirements.
“No class of market participant should receive a blanket exemption from registration, know-your-customer (KYC), Bank Secrecy Act (BSA), or AML/CFT requirements,” the letter said. “Our concern is not with individuals who merely write or publish software code, nor with responsible technological innovation. Rather, our concern is with broad exemptions that may shield individuals or entities whose activities facilitate the movement of digital assets.”
The renewed scrutiny triggered the sharp decline in the CLARITY Act’s passage odds, reflecting growing uncertainty about the bill’s future.