The crypto industry’s biggest legislative win of the year is running into a wall of badges. Four law enforcement groups have flagged concerns that key provisions in the Digital Asset Market Clarity Act could undercut their ability to police financial crimes in the crypto space.
The pushback comes after the CLARITY Act, formally known as H.R. 3633, cleared the Senate Banking Committee on May 14, 2026, with bipartisan support. The bill aims to draw clean jurisdictional lines between the SEC and CFTC for digital assets, but law enforcement agencies argue that some of its provisions create dangerous blind spots.
What law enforcement is worried about
The core concern is straightforward: provisions in the bill could shield developers of decentralized finance tools from liability and create safe harbors that effectively put certain crypto entities beyond the reach of key regulations.
The National Sheriffs’ Association was among the groups that sent letters to lawmakers in May 2026 outlining their objections. If DeFi developers can’t be held accountable for how their tools are used, and if safe harbors exempt some entities from standard compliance requirements, law enforcement loses leverage in investigations.
