The National Sheriffs Association on Thursday withdrew its opposition to the Digital Asset Market Clarity Act, telling Senate leadership that it is moving to a neutral position because of the bill’s complexity and because many important details are still being considered.
The group represents more than 3,000 elected sheriffs across the United States. The letter was signed by NSA President Sheriff Troy Wellman of Moody County, South Dakota, and Executive Director Justin Smith, and addressed to Senate Majority Leader John Thune and Minority Leader Chuck Schumer.
They wrote that the most appropriate course is to step back and allow the legislative process to continue toward what they described as a clear and effective regulatory framework.
Law enforcement pressure had been a major obstacle
The change is significant because opposition from law enforcement had been one of the main hurdles for the Clarity Act.
In May, the association told the Senate Banking Committee that Section 604, which would exempt decentralized finance, or DeFi, protocols from money transmitter obligations, would give mixers, tumblers, and DeFi platforms a blanket exemption from anti-money-laundering rules.
The group also warned at the time that evolving software, algorithms, and agentic AI would be used to move digital assets without tracing, launder money, finance terrorism, and evade sanctions.
White House met with groups that raised concerns
A month after the May letter, the White House invited law enforcement organizations that had raised objections to a meeting aimed at working through concerns tied to illicit finance.
Bill still faces an uncertain path this year
Even with the NSA’s shift, the Clarity Act’s path to becoming law this year remains uncertain.
The bill is scheduled for a cloture vote in September, but an ethics provision sought by Democrats remains unresolved. The House said last week that it would hold its final votes before the midterms immediately after the Senate returns, effectively ruling out the bill becoming law before November.