The CLARITY Act remains deadlocked as law enforcement groups propose changes to increase developer liability for crimes committed on their platforms. Trump’s crypto adviser Patrick Witt rejected the revisions, calling them “not even close” to White House expectations. The dispute centers on whether developers who do not hold customer funds should face prosecution. Supporters include police organizations and former officials, while critics like New York Attorney General Letitia James warn the bill could weaken enforcement. The Fraternal Order of Police recently backed the legislation after initial objections.
Law enforcement groups backed by key Democrats have suggested changes to the CLARITY Act that would make it easier to prosecute some crypto software developers. White House officials feel the suggestions still fall short of their expectations.
Trump’s crypto adviser, Patrick Witt, dismissed the proposal, saying claims that they were the result of “productive negotiations” with the White House and Treasury were far from the truth. He added that the administration had made its position clear to Sen. Catherine Cortez Masto for weeks and that the latest revision was “not even close” to meeting its expectations.
A report from Politico shows that two major groups representing U.S. prosecutors have submitted fresh changes to the White House. “Newest language is the culmination of productive negotiations with law enforcement, the White House, and Treasury, and we feel good about the chance to resolve this issue once and for all,” said Masto in a statement.
The proposal focuses on the Blockchain Regulatory Certainty Act (BRCA), removing provisions that could protect developers from criminal prosecution. At the heart of the dispute is whether law enforcement should hold crypto developers responsible for crimes committed on the platforms they build.
The Trump administration says authorities should protect builders who do not hold customer funds to encourage innovation. Critics and law enforcement groups warn the current language could make it easier for financial crimes to go unchecked.
New York Attorney General Letitia James shares this sentiment, saying the CLARITY Act could weaken state enforcement against crypto fraud by limiting the state’s ability to hold digital asset firms accountable. However, the Fraternal Order of Police recently dropped its objections and backed the crypto bill after previously raising concerns.
Other groups supporting the legislation include the National Organization of Black Law Enforcement Executives and the Federal Law Enforcement Officers Association. Additionally, over 160 former national security, intelligence, and other officials wrote a letter to the Senate in support of the bill, arguing it would strengthen efforts to combat illicit finance in the crypto space.
