Faryar Shirzad, chief policy officer at Coinbase, rejected claims that the CLARITY Act would weaken US national security. On July 11th Share on XHe said unclear cryptocurrency rules give bad actors space to operate outside a company’s regulatory boundaries. Shirzad argued that the bill would move more digital asset activity into a federal compliance system rather than leaving it under fragmented oversight.
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- The CLARITY Act applies anti-money laundering rules similar to banks and gives the Treasury Department stronger enforcement tools nationwide, Shirzad says.
- Warren warns that the current language may preserve cryptocurrency loopholes that foreign actors use to evade sanctions.
- Senate negotiators are targeting a combined bill before recess while unresolved disputes still threaten final passage.
Sherzad said the proposal would place cryptocurrency brokers, traders and exchanges under the duties of the Bank Secrecy Act. These duties include anti-money laundering programs, customer screening, suspicious activity reports, and sanctions compliance. He also pointed to provisions that allow platforms to stop suspicious transfers when law enforcement authorities request action. “This is not a free pass for crypto,” he wrote, describing the proposal as a strict security mandate.
Warren warns of the dangers of evading sanctions
Senator Elizabeth Warren took the opposite position. She shared an article by former Iranian National Security Council Director Richard Nephew and wrote: “As currently formulated, the Clarity Act is a ticket to evading sanctions.” Nephew argued that the bill could leave some DeFi participants outside of the Bank Secrecy Act’s clear duties and make enforcement more difficult.
The dispute centers on which companies must register, monitor transactions and respond to federal agencies. Warren and other critics say exemptions for some non-custodial services could leave loopholes that could be used by foreign governments, criminal groups and sanctioned entities. A Senate Minority Advisory Banking Committee He raised similar concerns. Supporters say existing sanctions laws will remain in place while the bill adds new powers to the Treasury Department and the Financial Crimes Enforcement Network.
The draft law includes new tools to combat money laundering
Senate Banking Committee Clarity Act Fact Sheet The bill says it applies federal anti-money laundering and counter-terrorism financing rules to centralized digital asset brokers. It also creates a Treasury authority known as Special Measure 6. This tool will allow officials to target jurisdictions, institutions or types of foreign transactions associated with key digital asset money laundering risks.
The proposal would increase funding for the FinCEN, require risk controls at digital asset companies, and create an information-sharing program between government and industry. It would also regulate cryptocurrency kiosks and require studies on mixing, illicit financing, cyber risks and national security threats. These measures support Shirzad’s point, while the discussion about decentralized services supports Warren’s call for more stringent language.
The Senate faces a narrow legislative window
Latest crypto.news coverage Senate staff says they plan to release a draft of the combined CLARITY Act during the week of July 13. The new text will combine the work of the banking and agriculture committees. Negotiators reportedly added more than 70 pages, including stronger consumer protections and changes requested during bipartisan talks.
Senate leaders are targeting potential action during the week of July 20, but many disputes remain open. Lawmakers continue to negotiate ethical rules, stablecoin rewards, decentralized finance protections, and legal safeguards for software developers. Crypto news I mentioned Sen. Ron Wyden wants the final bill to retain protections for developers who don’t control customer funds.
The House approved an earlier version in July 2025, while the Senate Banking Committee advanced its draft by a 15-9 vote in May 2026. Both chambers must approve identical text before the bill reaches the president. The Senate begins its recess on August 7, leaving limited time for debate and amendments. The national security dispute adds another test as supporters seek enough Democratic votes to pass it before lawmakers leave Washington for the summer.
