Crypto Bill is Right Step, But Security Concerns Must Be Addressed Before It Becomes Law
An FBI internet crime report released in April revealed that cryptocurrency-related fraud losses have surged to more than 11 billion nationwide. That staggering number grows only more concerning with reports that many victims of these losses are families, small businesses and people 60 and older.
Unfortunately, financial fraud, scams and crimes targeting innocent members of our communities are not new problems. But, the rise of cryptocurrency has enabled criminals to scale their operations in a regulatory environment that makes it hard for law enforcement to keep up with money that is transacted across platforms in mere minutes. With the promise of cryptocurrency and digital assets, comes the need for a commonsense regulatory framework.
Congress is currently considering an important law that would create this regulatory framework for the crypto industry. The CLARITY Act, which passed the House in 2025 and was recently voted out of the Senate Banking Committee, is well-intentioned legislation that has drawn criticism by many members of the law enforcement community, state attorneys general, and other stakeholders who warn the bill has some significant security gaps that criminals can and will exploit. These loopholes must be closed before the bill is brought to the Senate floor for a vote.
While traditional banks must adhere to anti-money laundering requirements that give law enforcement information to follow and report, cryptocurrencies don’t have the same requirements.
In an op-ed, former Utah Attorney General Sean Reyes argues that any platform that moves money should be held to the same anti-money laundering standards required of any community bank under the Bank Secrecy Act. “I have seen the worst of society up close. And I can tell you with certainty: the gaps in our current crypto anti-money laundering framework are a gift to every criminal enterprise my team and other law enforcement agencies ever pursued,” he writes.
National Sheriffs’ Association President Chris West called for similar improvements to the CLARITY Act. “Right now, criminals are choosing the fastest and least regulated path to move money — and staying ahead because of it. Congress can change that. Close the gap, or criminals will keep exploiting it,” he wrote.
The CLARITY Act was drafted with the right goals. With some commonsense changes, it can guide our nation’s crypto growth in a way that also helps protect the safety of our communities at the same time.