The CLARITY Act just cleared one of its most persistent obstacles. The Major County Sheriffs of America — a group representing the country’s largest sheriff’s offices — has officially dropped its opposition to the bill, shifting its position to ‘neutral’ and opening what many in the crypto industry see as a cleaner path to a full Senate vote.
- The CLARITY Act lost one of its biggest opponents after the Major County Sheriffs of America shifted its stance to neutral.
- The CLARITY Act had stalled partly over Section 604, which shields developers from liability for illicit user activity on decentralized platforms.
- Senate supporters are pushing for a full floor vote this month, ahead of November’s midterm elections.
- Banking groups still oppose the bill over concerns that stablecoin yield could pull deposits away from traditional financial institutions.
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What Changed the CLARITY Act’s Fortunes
In a letter sent Friday to Senate Banking Committee chair Tim Scott and Senator Elizabeth Warren, the MCSA confirmed the position change. The group had first raised alarms on May 14, specifically targeting Section 604 of the CLARITY Act — the section that incorporates the Blockchain Regulatory Certainty Act. That provision would protect software developers from being held legally responsible for illicit activity carried out by users on decentralized platforms they build.
The MCSA’s fear was straightforward: give developers a liability shield, and you hand criminals a structural excuse to exploit decentralized infrastructure while making it legally harder for investigators to trace funds or identify bad actors. It’s a concern that law enforcement agencies have raised repeatedly as crypto-related crime — from ransomware payments to child exploitation financing — has grown in sophistication and scale.
After some of those concerns were addressed through what appears to be behind-the-scenes negotiation with bill sponsors, the MCSA agreed to stand down. The group hasn’t become a supporter — neutral is a long way from endorsement — but in the politics of Senate floor scheduling, removing active opposition from a credible law enforcement constituency matters enormously.
Crypto investor Mark Chadwick, who has been tracking the bill’s progress closely, called the MCSA’s initial opposition one of the ‘biggest roadblocks’ to Senate passage. ‘With that hurdle now out of the way, the path to passage just got a lot clearer,’ Chadwick said. ‘One more major hurdle down.’ That’s not just investor optimism — it reflects how seriously Senate offices tend to weigh input from law enforcement organizations when weighing politically sensitive legislation.
The CLARITY Act’s Bumpy Road Through the Senate
The CLARITY Act passed the Senate Banking Committee back in May, largely along party lines. Since then, it’s been waiting for a full floor vote — and that wait has stretched longer than its supporters would like. The hold-up isn’t purely about the law enforcement concerns that are now, at least partially, resolved. A larger fight is playing out over stablecoins.
Banking groups have pushed hard against the bill, arguing that allowing stablecoin issuers to offer yield on holdings creates something functionally indistinguishable from a deposit account — but without the regulatory guardrails that apply to banks. Their concern, which isn’t entirely without merit, is that yield-bearing stablecoins could pull trillions of dollars out of the traditional banking system. That’s the kind of structural disruption that makes banking lobbyists very, very loud on Capitol Hill.
It’s worth putting this in context. The US has been trying to pass coherent crypto legislation for years. The CLARITY Act represents one of the more serious attempts — bipartisan enough to survive committee, detailed enough to address multiple asset classes, and timed to catch a moment where the political appetite for crypto regulation has arguably never been higher. Letting it die over stablecoin yield disputes would be a significant failure for an industry that’s spent years lobbying for regulatory clarity.
What the MCSA Still Wants from the CLARITY Act
Dropping opposition isn’t the same as walking away from the table entirely. The MCSA made clear in its letter that it still wants amendments — and their requests are specific enough to suggest ongoing engagement rather than a final goodbye.
Chief among the asks: the MCSA wants state and local law enforcement explicitly included in Section 309, which currently requires the Treasury Department to study decentralized finance and illicit finance risks. Right now, that section appears to focus on federal-level analysis, leaving out the agencies that, as MCSA President Bob Gualtieri put it, are actually on the ground.
‘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’s broader ask is for Congress to fund the training, technology, and partnerships that local agencies need to tackle ‘increasingly sophisticated digital asset-enabled activity’ — a phrase that covers a wide and genuinely alarming range: fraud, narcotics trafficking, ransomware, child exploitation, and terrorism financing. That list isn’t rhetorical. The Financial Crimes Enforcement Network’s advisory archive makes clear how consistently crypto rails show up in serious criminal cases, and how under-resourced local investigators often are when they try to follow the money on-chain.
Can the Senate Pass the CLARITY Act Before November?
The short-term political window is real. Senators backing the CLARITY Act are explicitly targeting a floor vote this month, with an eye on getting the bill to President Biden’s desk before November’s midterm elections reshape the legislative calendar. Post-midterms, the dynamics in both chambers could shift considerably depending on the results, and crypto legislation that’s already taken years to reach this point could easily slide back to the bottom of the queue.
The remaining obstacle — banking sector opposition over stablecoin yield — is harder to negotiate away than the law enforcement concerns were. Banks aren’t going to accept a provision that they believe could hollow out deposit bases without significant concessions, and stablecoin issuers aren’t going to give up yield-generation voluntarily. That’s a genuine structural conflict of interest, not a misunderstanding that a well-placed letter can resolve.
Still, the momentum shift is real. Removing a credible law enforcement group from the opposition column changes the optics and the vote math. Senators in swing states who were looking for political cover to support or oppose the bill now have less cover on one side of the ledger. And in a chamber where a handful of votes can determine whether major legislation lives or dies, that’s not nothing.
The crypto industry has been waiting for a regulatory framework with actual legal teeth for a long time. The CLARITY Act isn’t perfect — no legislation this complex ever is — but it’s closer to the finish line than most observers expected it to be six months ago. Whether Congress can thread the needle between law enforcement demands, banking sector anxiety, and crypto industry expectations before the election clock runs out is the question that will define the next few weeks of US digital asset policy.
Source: Cointelegraph
