Lummis Defends CLARITY Act Safeguards As July Senate Vote Nears

Sen. Cynthia Lummis defended the Digital Asset Market CLARITY Act after critics argued that the crypto market-structure bill leaves gaps for illicit finance.

In a July 1 X post, Lummis said the bill has “16+ illicit finance safeguards, not loopholes.” She listed Section 201 for Bank Secrecy Act and AML coverage, Section 303 for new sanctions tools tied to digital assets, and Section 305 for temporary holds on suspicious transactions.

The latest defense follows Lummis’s earlier pushback on Jamie Dimon, when she said the bill already included safeguards against illicit finance, fraud and regulatory gaps in digital-asset markets.

The dispute now centers on whether the bill’s developer protections and DeFi language leave enough room for law enforcement action. Critics have targeted Section 604, the Blockchain Regulatory Certainty Act, while supporters point to AML, sanctions, seizure, reporting and temporary-hold provisions elsewhere in the bill.

Bill Text Includes AML And Temporary-Hold Sections

The Senate Banking text lists a full title on protecting against illicit finance, including Bank Secrecy Act treatment, sanctions-law treatment, digital asset examination standards, kiosk rules and a study on illicit use of digital assets.

Section 303 would let the Treasury secretary impose conditions or prohibitions on certain fund transfers involving foreign jurisdictions, foreign financial institutions, transaction classes or account types found to be a primary money laundering concern in connection with illicit digital asset finance.

Section 305 defines a temporary hold as a delay on a digital asset transaction, conversion or withdrawal for a reasonable period of up to 30 calendar days, with a possible 150-day extension after a qualified written request. The provision applies when a covered person acts in good faith based on a reasonable belief that the transaction is tied to an actual or attempted violation of state or federal law, or after receiving a qualified request from a covered agency.

The bill also preserves existing securities insider-trading law. Section 109 says nothing in the act limits the application of insider-trading laws, while later coordination language covers SEC and CFTC information sharing for anti-fraud, anti-manipulation and market-integrity enforcement.

Senate Floor Path Still Needs Democratic Votes

The CLARITY Act passed the House in July 2025 and cleared Senate Banking in May 2026. The committee advanced the bill in a 15-9 vote, with all Republicans joined by two Democrats, but those Democratic votes did not guarantee final floor support.

The bill moved closer to the Senate floor after the earlier 15-9 committee vote. The next steps include full Senate consideration, alignment with Senate Agriculture language, reconciliation with the House-passed version if changes are made, and a final signature if both chambers pass matching text.

White House officials have also been involved in the remaining illicit-finance talks. A recent White House meeting brought law-enforcement concerns back into the Senate process as lawmakers worked through DeFi treatment, developer protections and AML language.