The four major U.S. law enforcement agencies jointly send a letter to the DOJ and the White House: Section 604 of the "Clarity Act" may create loopholes for cryptocurrency crime investigations

BlockBeats News, June 24 — The National District Attorneys Association, the National Association of Assistant U.S. Attorneys, the International Association of Chiefs of Police, and the National Sheriffs' Association jointly sent a letter to the Department of Justice and the White House on Tuesday, warning that Section 604 of the Digital Asset Market Structure Clarity Act contains serious enforcement loopholes that could make it difficult for authorities to investigate and prosecute crypto-related crimes.

The letter pointed out that Section 604 includes broad exemption clauses that could allow individuals or entities assisting in the circulation of digital assets to evade regulatory accountability, interfering with long-standing investigative and enforcement powers. The four organizations emphasized that their concern is not about developers who simply write or publish software code, but about the broad exemptions that could potentially shield illegal activities.

The core controversy revolves around Section 604 — the "Blockchain Regulatory Certainty Act" (BRCA) — which was originally a standalone bill before being incorporated into the Clarity Act, aiming to provide safe harbor for non-custodial developers and clarify that they are not considered money transmitters. Law enforcement agencies believe this could create obstacles for investigating crypto crimes.

Additionally, the letter pointed out that several other provisions of the bill would "reduce transparency, weaken accountability, and create loopholes within the anti-money laundering framework." On the same day, nearly a hundred Catholic leaders from dioceses across the U.S. also issued warnings, stating that the bill could undermine protections against human trafficking.

In response, White House crypto advisor Patrick Witte insisted that the Clarity Act is a "pro-regulation, pro-enforcement" bill, emphasizing that the U.S. must proactively set standards or risk passively accepting rules from other countries.