Sheriffs Finally Wave the CLARITY Flag Through 🚓

The Major County Sheriffs of America has shifted its position on the CLARITY Act to "neutral," removing what crypto investor Mark Chadwick described as one of the "biggest roadblocks" preventing the digital asset market structure bill from reaching the Senate floor. In a Friday letter to Senate Banking Committee chair Tim Scott and Senator Elizabeth Warren, MCSA said additional clarity around Section 604, the Blockchain Regulatory Certainty Act, addressed its earlier concerns that the provision could create a loophole for criminals exploiting decentralized platforms. "Based on that continued review, MCSA is now neutral on H.R. 3633. We look forward to continuing to work with Congress and the Administration on targeted improvements to the bill," the group wrote, with MCSA President and Pinellas County Sheriff Bob Gualtieri signing the letter. The original opposition, raised in a May 14 letter, focused on whether Section 604 would shield developers from liability for illicit activity by users. Coinbase CEO Brian Armstrong called the update "huge."

MCSA did not endorse the bill outright and asked Congress to amend Section 309 to formally include state and local law enforcement in the Treasury Department's study of decentralized finance and illicit finance risks. Gualtieri argued that Congress should provide training, technology and resources 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," he said. The organization, which represents sheriffs' offices in counties of 500,000 residents or more serving over 120 million Americans, also requested seats on advisory bodies and interagency working groups created under the legislation.

The shift came one day after NOBLE delivered the first police endorsement of the CLARITY Act and as Senate leaders push for a July floor vote, aiming to pass the bill and sign it into law before the US midterm elections in November. The Senate Banking Committee passed the bill mostly along party lines in May, and passage has since been stalled by banking groups seeking to restrict stablecoin yield, which they argue functions like an unregulated deposit product that could drive trillions of dollars in outflows from the traditional banking system. Senator Cynthia Lummis defended the bill against Warren's claims of illicit finance, citing more than 16 built-in safeguards, writing on X on July 2 that "America has led every great technological revolution — the railroad, the internet, the smartphone. Digital assets are next. The Clarity Act makes sure we don't hand that lead to someone else."

Ethics concerns have resurfaced alongside the law enforcement news after reports that President Donald Trump's family crypto empire made over $1.4B in 2025, including more than $630M from the Official Trump memecoin. Senator Kirsten Gillibrand renewed her call to bar elected officials from creating their own crypto tokens, calling it "a commonsense requirement that should get broad bipartisan support," while Lido strategic advisor Hasu wrote, "Shameful is what it is. And I don't see how it doesn't backfire on this industry in a major way." Ethics provisions in the CLARITY Act hit a rocky start last month, and Democrats have insisted the concerns must be addressed before they support the bill.

The final updated CLARITY Act text was expected to be published over the July 4th weekend, with a potential Senate floor vote later in the month. The bill still requires 60 Senate votes before the August recess. Bloomberg projected a 60% chance the bill becomes law this year, while Galaxy Research put the odds at 50-50. With MCSA's neutral stance and NOBLE's endorsement, two of the four law enforcement agencies that opposed Section 604 in June have now stepped aside as the path to passage moves into its final stretch.