What to know:
- CLARITY Act advances in the Senate with stronger support to combat crypto-related crime and illicit finance.
- Treasury would gain authority to freeze suspicious crypto transactions linked to money laundering and cybercrime.
- Bill expands AML and BSA rules to crypto exchanges and DeFi platforms while protecting compliant firms.
The CLARITY Act has become relevant again as Cynthia Lummis pushes for the legislation, which will help the United States in its war on crimes involving cryptocurrencies. This bill is designed to counteract criminal organizations like the Lazarus Group from North Korea that have been involved in significant crypto heists. If this CLARITY Act passes into law, the U.S. Treasury will have greater authority to freeze transactions involving crypto assets.
CLARITY Act Cracks Down on Crypto Crime
The CLARITY Act, or H.R. 3633, would empower the Treasury to act on foreign digital asset businesses that are engaging in money laundering, cyberattacks, or any other sort of criminal behavior.
The proposed legislation would provide immunity from legal action to any crypto businesses that may choose to freeze any suspicious transactions. The proposed act states that any crypto exchange or stablecoin issuer who freezes any suspicious transactions associated with any criminal behavior will be protected from any lawsuit against such freezing of transactions.
Another provision that would be implemented by the CLARITY Act is expanding the application of BSA and AML to the realm of cryptocurrency exchanges and DeFi systems. This way, more crypto companies will have to adhere to the same set of standards as those in the conventional banking world.
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The Act Includes Funding for Crypto Investigations
In addition to giving them enforcement authority, the CLARITY Act has earmarked extra money to boost the investigation of crypto crimes.
Under the CLARITY Act, $150 million has been allocated to FinCEN to enhance its capability of regulating digital assets. Moreover, $150 million in grants has been set aside to help law enforcement agencies at the state and local level investigate crypto crimes.
Moreover, the proposed bill will create an information exchange mechanism among the Departments of Justice, Treasury, and Homeland Security for enhancing coordination in monitoring and combating the illegal use of digital assets.
CLARITY Act Moves Forward in Congress
Senator Cynthia Lummis issued the revised version of the CLARITY Act on July 22, 2026. The bill was previously passed by the House of Representatives in July 2025 with a margin of 294-134.
The May 2026 vote from the Senate Banking Committee in favor of the bill was a 15-9 margin.
According to Senator Cynthia Lummis, the CLARITY Act is likely to be the nation’s final opportunity to set up regulatory rules for digital assets at the end of the decade. It is possible that if the US government delays the regulation, other countries might come up with their own regulations first.
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