FLEOA cosigns CLARITY Act, asks Senate to please not nerf the cop beat 🪙

The Digital Asset Market Clarity Act picked up its second endorsement from a major US law enforcement organization on July 10, when the Federal Law Enforcement Officers Association (FLEOA) said it had submitted a letter to the US Senate Banking Committee backing the bill while pressing for changes to its decentralized finance provisions. FLEOA called the current version of the CLARITY Act "meaningful progress toward balancing technological innovation with public safety" and praised the committee "for its efforts to establish a clear regulatory framework for digital assets that promotes responsible innovation while preserving critical criminal, anti-money laundering, counterterrorism financing, sanctions enforcement, and investigative authorities." Ji Kim, CEO of the Crypto Council, said in a Monday statement that the endorsement confirms "this bill is strong on consumer protection and law enforcement."

The FLEOA letter arrived nine days after the National Organization of Black Law Enforcement Executives (NOBLE) publicly backed the bill, with both endorsements aimed at countering claims that the legislation would weaken the government's ability to police crypto crime. FLEOA also urged lawmakers to narrow the act's DeFi protections, clarify who is accountable in decentralized finance systems, prevent firms from sidestepping regulation by claiming to be decentralized, revise "specific intent" language to ease the establishment of liability, and explicitly affirm that the legislation does not limit existing federal investigative authority.

The new backing follows a months-long tug-of war over Section 604 of the bill, which shields developers from liability for illicit activity carried out by users on their decentralized platforms. In June, the National District Attorneys Association, the National Association of Assistant United States Attorneys, the International Association of Chiefs of Police and the National Sheriffs' Association wrote to the White House warning that the provision could create broad exemptions complicating crypto-crime investigations. The White House subsequently invited objecting law enforcement groups to a meeting in late June, and in July the Major County Sheriffs of America shifted its stance on the bill to neutral after initially opposing it.

With less than four weeks until the Senate's Aug. 8 recess, the endorsements are being read as a boost for the bill's prospects, though negotiations over its DeFi language remain unresolved.