US Domestic — 2026-06-25

Law Enforcement Groups Warn Crypto Clarity Act Creates Dangerous Money Laundering Loopholes as 70000 Officers Urge Attorney General to Act

BLUFTuesday's letter converts law enforcement opposition into a functional legislative veto, giving Warner and Cortez Masto documented justification to hold cloture unless Section 604 is rewritten.

Four law enforcement groups jointly wrote Acting Attorney General Todd Blanche on Tuesday warning that Section 604 of the Digital Asset Market Clarity Act creates exemptions that could shield mixers, tumblers, and certain DeFi operators from AML and know-your-customer requirements 123. The signatories, the National District Attorneys Association, National Association of Assistant U.S. Attorneys, International Association of Chiefs of Police, and National Sheriffs' Association, collectively represent more than 70,000 professionals and also argued the bill imposes no suspicious activity reporting obligations comparable to those on traditional financial institutions 3. Coinbase's U.S. Policy Director Robin Cook told ICIJ that Section 301 brings most automated trading protocols under standard AML requirements, disputing the loophole characterization 1. The Senate Banking Committee cleared the bill 15-9 in May, and Senators Warner and Cortez Masto have each conditioned their votes on law enforcement's approval of Section 604; the bill requires 60 votes to advance 3.

Analysis
Tuesday's letter is a formal legislative gate: Warner and Cortez Masto have conditioned their votes on law enforcement's approval of Section 604, and the bill requires 60 votes to advance. Section 604's BRCA language strips money-transmitter status from infrastructure providers lacking asset custody, removing mixer and DeFi operators from SAR obligations, the gap law enforcement calls unrecoverable if enacted. Routing the letter to the Acting AG rather than Senate leadership places the Trump administration under pressure to broker a revision before the July 17 hearing. Moderate confidence reflects four named organizations, both swing senators' commitments on record, and a proximate hearing. Three of four outlets relay ICIJ's reporting on one document with no independent DOJ or Senate sourcing. Coinbase's Section 301 argument could supply the legal basis for a targeted amendment satisfying the SAR gap without voiding Section 604's developer protections, enabling passage in modified form.

4 sources