Key Takeaways
The Alliance to End Human Trafficking asked Senate leaders to revisit Section 604 of the CLARITY Act, citing concerns it could weaken anti-money-laundering safeguards, in a letter reported by Punchbowl on June 23.
Section 604 would codify the Blockchain Regulatory Certainty Act, shielding decentralized-app developers from money-transmitter rules and from liability for crimes committed by users.
Crypto industry groups continue backing the bill, and Polymarket put the odds of the CLARITY Act becoming law in 2026 at 42 percent.
A Catholic-backed anti-trafficking group has asked the Senate to take another look at a decentralized finance provision in the CLARITY Act, the crypto market structure bill now stalled in the chamber. The Alliance to End Human Trafficking sent the request to Senate Majority Leader John Thune and Minority Leader Chuck Schumer in a letter reported by Punchbowl on June 23.
The concern centers on Section 604, which would codify the Blockchain Regulatory Certainty Act. Under that language, developers who build decentralized blockchain applications would not be treated as money transmitters and would not be held responsible for crimes committed by users of those platforms.
The Alliance argued the provision could create regulatory gaps that make it harder for authorities to detect and track financial activity tied to crimes such as human trafficking. It urged Congress to confirm the bill carries adequate anti-money-laundering protections before moving forward, according to crypto.news.
Supporters of the provision see it differently. Industry groups argue that writing software is not the same as running a money-transmitting business, and that holding developers liable for how strangers use open code would stall US crypto development. The Digital Chamber said on June 23 that its members met with lawmakers, including Senator Cynthia Lummis, to press for the bill.
The dispute is really about where accountability sits when money moves without a middleman. It is the same tension visible as the DOJ seized infrastructure tied to billions in crypto laundering and as the House scheduled a July 17 field hearing to make its case for the CLARITY Act. Senator Lummis has said roughly 80 to 85 percent of the bill is finished, though the Section 604 language and ethics rules remain unresolved. Worth watching whether the provision survives the Senate.
People Also Ask
What is Section 604 of the CLARITY Act?
Section 604 would codify the Blockchain Regulatory Certainty Act, which says developers of decentralized blockchain applications are not money transmitters and are not liable for crimes committed by users of those applications.
Why does the Alliance to End Human Trafficking oppose the provision?
The group argues the language could create regulatory gaps that make it harder for authorities to detect and track illicit financial activity, including funds tied to human trafficking, and it wants stronger anti-money-laundering safeguards.
What is the CLARITY Act?
The CLARITY Act is a crypto market structure bill that sets rules for how digital assets are regulated in the United States. It passed the House in 2025 and is awaiting a Senate floor vote.
Will the CLARITY Act become law in 2026?
It is uncertain. Senator Cynthia Lummis has said most of the bill is finished, but ethics and DeFi provisions remain unresolved, and Polymarket put the odds of passage in 2026 at 42 percent.
Sources: crypto.news, Punchbowl.