The Blockchain Association fired back at the National Sheriffs' Association on August 3, sending Senate leaders an eight-page rebuttal that accuses the sheriffs of misunderstanding how the CLARITY Act would actually regulate crypto. The trade group disputed claims that the bill gives DeFi platforms and developers too much cover to evade anti-money laundering rules.

At the heart of the dispute is Section 10604, which the sheriffs want removed or gutted. The Blockchain Association argues the section does exactly what it's supposed to do: it protects software developers who write neutral code but have no control over how their tools get used. The bill, they say, still leaves money laundering and sanctions laws fully intact.

Revenue alone doesn't make you a money transmitter

The sheriffs' position rests on a simple premise. They want Congress to regulate anyone who "receives revenue" from the digital asset marketplace. The Blockchain Association says that's not how financial regulation works. FinCEN's 2019 guidance and FATF standards both focus on whether someone actually performs covered financial functions for another party, not whether they make money from the space.

The group laid out the distinction clearly. Registered crypto brokers, dealers, and exchanges would face full Bank Secrecy Act duties under the bill. Developers who only create software without controlling assets or transactions would not. That's the actual separation the law makes.

The clock is ticking on the Senate floor

The legislative window for CLARITY is narrowing fast. The Senate ended Monday without scheduling a vote on H.R. 3633. Instead, lawmakers invoked cloture on a continuing resolution and pushed that measure to Tuesday. No public vote date has been announced for the market structure bill, and every day the chamber stays bogged down on other business makes passage harder.

The CLARITY Act would authorize $600 million per year for digital asset investigations from 2027 through 2031. That funding piece alone signals where Congress sees the enforcement priority. But without floor time, even bipartisan bills can stall indefinitely.

This article is informational and does not constitute financial or legal advice.