National police union reverses course to back the CLARITY Act

A US police union representing more than 382,000 members has reversed its position and endorsed the latest CLARITY Act after lawmakers added language addressing its concerns about cryptocurrency investigations.

According to former Fox Business reporter Eleanor Terrett, the National Fraternal Order of Police now supports the bill after reviewing provisions tied to the Blockchain Regulatory Certainty Act. The union believes the language protects the ability of police and prosecutors to pursue crimes involving digital assets.

In a July 24 letter to Senate Banking Committee Chairman Tim Scott and ranking member Elizabeth Warren, FOP National President Patrick Yoes backed the latest version of H.R. 3633, formally known as the Digital Asset Market Clarity Act.

Yoes wrote that revised Section 10604, which amends the BRCA, does not restrict law enforcement agencies or prosecutors from addressing illegal conduct involving cryptocurrencies. According to the letter, the clarification directly answers concerns the union raised during earlier negotiations over the legislation.

Terrett, however, reported that the BRCA provisions remained unchanged in the latest bill released Wednesday. She noted that it was unclear which changes the FOP was referring to when it announced its support.

The apparent inconsistency leaves open whether the union assessed language added at an earlier stage, received separate assurances from lawmakers, or interpreted an existing provision differently. Neither the FOP letter nor Terrett’s report identified a specific newly amended passage beyond Section 10604.

Revised provisions preserve crypto enforcement powers

Explaining its reversal, the FOP cited several sections that it believes will help federal, state and local agencies investigate financial crimes involving digital assets. The union said investigators need clear authority and practical tools as they confront fraud, organized crime and illicit finance conducted through crypto networks.

Among those provisions, the legislation would create safeguards addressing fraud linked to digital asset kiosks. According to the FOP, the measure also applies anti-money laundering and sanctions compliance duties across parts of the crypto industry.

The letter pointed to rules intended to help investigators act before suspected criminal funds leave their reach. Those provisions would protect digital asset companies and stablecoin issuers from liability when they voluntarily delay suspicious transactions or respond to a law enforcement request.

Given how quickly cryptocurrencies can cross jurisdictions, the FOP argued that temporary transaction holds could give investigators time to prevent losses, recover stolen assets and disrupt illegal activity. The union presented those protections as an important tool for cases in which funds might otherwise disappear before officers can intervene.

Bank Secrecy Act provisions also contributed to the union’s support. According to the letter, the revised bill updates the treatment of digital assets under rules governing monetary instruments, helping existing reporting and enforcement requirements apply more clearly to crypto activity.

Other sections direct government agencies to share information and coordinate their responses to illicit finance risks. The FOP added that the bill would strengthen international cooperation on anti-money laundering enforcement and sanctions involving digital assets.

Under Title IX, the legislation would establish a grant program for state and local digital asset enforcement work. The FOP said it would also create a national security and law enforcement training program, form a digital asset cyber innovation center and introduce measures designed to protect older consumers from deception.

Addressing protections for software developers, the union said the bill would not prevent authorities from investigating crimes, prosecuting offenders or applying existing criminal laws. Its letter specifically cited 18 U.S.C. § 1960, a federal statute covering certain unlicensed money-transmitting activity.

The FOP also pointed to language preserving liability for people who knowingly transfer funds tied to criminal offenses or promote unlawful activity. According to the union, this distinction gives responsible developers legal certainty without shielding individuals who intentionally assist illegal transactions.

Senate delay pushes CLARITY Act beyond the August recess

The endorsement has arrived as the CLARITY Act faces a shrinking congressional timetable. As crypto.news reported earlier on July 24, Senate Majority Leader John Thune does not expect the Senate to approve the market structure legislation before lawmakers leave Washington for the August recess.

Thune’s position removes a deadline that crypto industry supporters had treated as important for completing the bill in 2026. Following the development, Polymarket traders lowered the probability of the legislation becoming law this year to 33%.

Attention has therefore moved to the session after the November midterm elections. During that period, lawmakers will return to government funding measures, defense legislation and other unfinished bills that will also compete for limited Senate floor time.

According to Wintermute head of policy and advocacy Ron Hammond, the CLARITY Act still has enough bipartisan backing to pass but has become trapped in election-year disputes. Hammond attributed the immediate obstacle to political messaging rather than a shortage of votes in the Senate.

With Democrats preparing to campaign against President Donald Trump and alleged corruption, Hammond expects some lawmakers to avoid backing a major cryptocurrency bill before the election. His assessment suggests the FOP endorsement may resolve one law enforcement dispute without removing the political barriers delaying a Senate vote.

In its letter, the FOP described the latest provisions as a meaningful effort to provide stronger investigative tools, clearer compliance paths and better coordination between agencies. The union said its initial concerns had been satisfactorily addressed and offered to work with lawmakers to secure passage of the amended bill.