Sheriffs stand down on CLARITY Act — path clears, ethics fog rolls in 🚔

The Major County Sheriffs of America has shifted its position on the CLARITY Act to "neutral," removing what crypto investor Mark Chadwick called one of the "biggest roadblocks" preventing the Senate from passing the crypto market structure bill. In a letter Friday to Senate Banking Committee chair Tim Scott and Senator Elizabeth Warren, the MCSA said its earlier concerns over Section 604 — raised in a May 14 letter — had been sufficiently addressed. "With that hurdle now out of the way, the path to passage just got a lot clearer," Chadwick said. "One more major hurdle down." Section 604 relates to the Blockchain Regulatory Certainty Act, which seeks to protect developers from liability for illicit activity committed by users on their decentralized platforms. The MCSA had previously argued that Section 604 could create a loophole for criminals to exploit, making it tougher for law enforcement to investigate crypto-related crimes.

The MCSA stopped short of full endorsement, requesting that Section 309 — which requires the Treasury Department to study decentralized finance and illicit finance risks — be amended to explicitly include state law enforcement. MCSA President Bob Gualtieri said Congress should provide the training, technology and resources needed to "investigate increasingly sophisticated digital asset-enabled activity" tied to fraud, narcotics trafficking, ransomware, child exploitation, terrorism financing and other crimes. "State and local law enforcement agencies investigate these crimes every day and must have the tools, partnerships, and resources necessary to identify offenders, trace illicit proceeds, recover assets, and protect victims," Gualtieri said. Coinbase CEO Brian Armstrong characterized the MCSA's update as "huge," implying a clearer path to passage.

The bill has awaited a full Senate vote since May, when the Senate Banking Committee passed it mostly along party lines. Senators backing the measure are pushing for a floor vote this month, hoping to pass it and secure signature into law before the U.S. midterm elections in November. Senate leaders have targeted July for passage. Banking groups have separately pressed to restrict stablecoin yield, arguing it functions like an unregulated deposit product that could drive trillions of dollars in outflows from the traditional banking system.

Separately, ethics concerns resurfaced after reports that President Donald Trump's family crypto empire generated over $1.4 billion in 2025, including more than $630 million from the Official Trump memecoin. Senator Kirsten Gillibrand used the figure to renew calls for barring elected officials from issuing their own crypto tokens. "This is a commonsense requirement that should get broad bipartisan support – public officials and their spouses should not be issuing memecoins," Gillibrand said. "We cannot let self-dealing destroy an opportunity to strengthen consumer protections, crack down on illicit finance, and expand economic opportunity for the millions of Americans our financial system has left behind." Lido strategic advisor Hasu called the situation "shameful," adding, "I don't see how it doesn't backfire on this industry in a major way." Bloomberg projects a 60% chance the CLARITY Act becomes law this year, while Galaxy Research puts the odds at 50-50.