Faith Group Says CLARITY Act's DeFi Clause Could Be a Sin Tracker Can't Confess 🕊️

The Alliance to End Human Trafficking has formally objected to the decentralized finance provision inside the CLARITY Act, warning that the language would weaken safeguards against illicit finance and create openings that bad actors could exploit. The Catholic-backed advocacy group, in a letter obtained by Punchbowl, addressed its concerns to Senate Majority Leader John Thune and Minority Leader Charles Schumer, marking the latest opposition facing the crypto bill as the Senate works within a narrow legislative window.

The provision in question is Section 604 of the CLARITY Act, which codifies the Blockchain Regulatory Certainty Act and bars crypto software developers from being held liable for crimes committed by users on decentralized platforms. Developers are also shielded from classification as money transmitters under the clause. AEHT argued that Section 604 introduces "broad carveouts and regulatory ambiguities" that would complicate efforts to monitor illicit financial flows tied to offenses including human trafficking.

The group's objections echo earlier warnings from law enforcement groups that have raised concerns about decentralized finance oversight in pending U.S. crypto legislation. AEHT's intervention adds a faith-based voice to a coalition of institutional critics and places additional pressure on lawmakers negotiating the bill's final shape, particularly around how decentralized protocols and their builders are treated under existing financial-crime statutes.

The CLARITY Act remains under active consideration in the Senate, where supporters have framed the legislation as a step toward establishing a clearer regulatory framework for digital assets. With the AEHT letter now in the record, the DeFi provision has emerged as one of the more contentious elements of the package, alongside ongoing debates over market structure, stablecoin treatment and the allocation of oversight authority between the Securities and Exchange Commission and the Commodity Futures Trading Commission.