The U.S. Department of Justice (DOJ) has pushed back on criticism from several law enforcement groups against the CLARITY Act. He stated that they believe the claims are factually inaccurate and that the bill will benefit criminal investigations.
US DOJ Shuts Down CLARITY Act Criticism
On Wednesday, June 24, a DOJ spokesperson responded to four big law enforcement groups that had requested that the White House rethink parts of the CLARITY Act, including Section 604.
“The letter from these groups contains factual inaccuracies and mischaracterizes Administration policy,” the DOJ spokesperson said, per The Blockchain Association.
This comes after law enforcement officials sent a letter noting that the CLARITY Act may leave regulatory gaps that criminals could exploit. It included signatories from the National District Attorneys Association (NDAA), National Association of Assistant U.S. Attorneys (NAAUSA), International Association of Chiefs of Police (IACP) and National Sheriffs’ Association (NASA).
The organizations made that case in a letter dated June 23. They stated that “broad exemptions could create gaps in oversight and accountability that sophisticated criminal actors may exploit.”
The groups also said the CLARITY Act’s Section 604 “risks creating gaps in oversight and accountability.” Moreover, they believe it may undermine current enforcement structures used by investigators and prosecutors.
The organizations noted their concerns had nothing to do with opposition to innovation, but were rooted in public safety. “Our concern is not with individuals who merely write or publish software code, nor with responsible technological innovation,” the letter stated.
Rather, the groups are concerned about protections that might afford entities that function as intermediaries in the digital asset business regulatory review. It also questioned developer protections in the Blockchain Regulatory Certainty Act.
Spokesperson Clears The Air On Concerns About Regulatory Authority
The DOJ disagreed and stated that the CLARITY Act would not impede criminal enforcement.
“Law enforcement’s access to relevant information will not change,” the spokesperson said. They further remarked that the CLARITY Act “does not restrict DOJ’s ability to investigate or prosecute criminal activity involving digital assets, including drug trafficking, human smuggling, and terrorism financing.”
The law enforcement group had also said there was no reason to grant exemptions to any group of market participants. They believe everyone should be subject to registration and adhere to know-your-customer rules.
Also, they seek compliance with Bank Secrecy Act requirements or the anti-money laundering provisions under the CLARITY Act. They argued that regulatory clarity must not be achieved at the cost of accountability, transparency, victim protection, or public safety.
