The Clarity Act, once seen as on track for a May markup, has instead spent the past 48 hours collecting new problems. Senator Thom Tillis flagged concerns from law enforcement groups about a specific provision on Tuesday. Senator Cynthia Lummis responded: 'This isn't a big new hurdle, and is something I'm working on now. I am committed to keeping protections for non-money transmitting developers safe without tying law enforcement's hands.'
Tillis Flags Enforcement Concerns
Tillis's objection stems from feedback by law enforcement groups. The bill, which was supposed to provide a regulatory framework for crypto, now faces an uncertain path. Coinbase chief legal officer Paul Grewal did not wait. He published a detailed thread pushing back on the premise that the Clarity Act weakens law enforcement, calling it flat wrong. Grewal listed specifics: expands Bank Secrecy Act to digital asset brokers and exchanges with full AML/sanctions compliance; enhances seizure and forfeiture authorities for digital assets; creates designated law enforcement contacts at crypto kiosks nationwide; establishes new information-sharing channels between DOJ, Treasury, and private sector; forces crypto activity into U.S. jurisdiction instead of offshore. 'The alternative, an offshore crypto industry, gives law enforcement far fewer tools,' Grewal said.
Coinbase CLO Counters Point by Point
Grewal's rebuttal targeted the core argument of critics. His five points not only argued that the bill strengthens law enforcement but also implied that failure would push crypto activity beyond U.S. regulatory reach. The details, including the LE contact system and cross-sector information sharing, were not previously publicized in this form.
Expert Calls Bill Dead
Legal commentator MetaLawMan laid out the scenario few want to say aloud. If the Clarity Act fails: the GENIUS Act stays as the governing stablecoin law; crypto exchanges keep paying rewards on stablecoin holdings; Jamie Dimon's predicted bank deposit flight either happens or not with no legislative answer; the Trump family continues operating crypto ventures without new restrictions. Asked directly if the bill will pass, MetaLawMan said: 'My guess is no, it won't pass. It should pass. It's an embarrassment how dysfunctional our government has become. Kazakhstan has passed a legal framework for crypto, for goodness sakes.'