Ethics fight still holds up CLARITY Act despite softer opposition

For crypto investors watching US market structure, the CLARITY Act looks slightly easier to bring to a Senate vote, but not much easier to pass. Opposition from law enforcement has weakened, while the political fight over crypto conflicts of interest has become more intense.

The shift came after the Major County Sheriffs of America moved from opposing the bill to a neutral stance in a July 3 letter. The group had warned that Section 604, a safe harbor for developers and infrastructure providers that do not control user funds, could make illicit activity harder to track. It now wants a narrower set of changes, including a formal role for state and local law enforcement in Treasury advisory work and more funding for training, forensics, technology, and investigations.

A second group, the National Organization of Black Law Enforcement Executives, endorsed the bill. It said CLARITY would give investigators added tools without removing current powers tied to money laundering, sanctions, conspiracy, or unlicensed money transmission. The bill also includes a temporary hold mechanism for suspicious transactions, along with Bank Secrecy Act and sanctions provisions.

That progress may not matter if Senate Democrats withhold votes over ethics language. Sen. Kirsten Gillibrand renewed her push to bar elected officials and their spouses from issuing or sponsoring digital assets after Trump's financial disclosure showed large 2025 income linked to his memecoin. With floor time limited before the August recess, that dispute still appears to be the bigger obstacle.