Lummis defends CLARITY Act as Warren warns crypto bill could fuel illicit finance
Wyoming’s Senator Cynthia Lummis countered Senator Elizabeth Warren’s recent criticisms of the Clarity Act. She pointed to more than 16 statutory safeguards to refute claims that the bill creates loopholes for illicit finance.
The latest clash comes as lawmakers continue negotiations on the Senate version of the crypto market structure bill, with supporters pushing to advance the legislation before Congress’s extended August recess.
As previously reported by Cryptopolitan, Warren had previously argued that bad actors still utilize crypto networks to move billions, and the bill only threatens to dilute critical anti-money laundering protections.
At the moment, Republicans and Democrats are at odds over the crypto legislation. Nonetheless, the bill’s backers are working against the clock to pass it before the August recess.
Senator Lummis insists the bill provides protections against illicit finance
The Clarity Act is designed to establish a comprehensive regulatory framework for digital assets by defining the roles of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), while introducing new compliance standards for crypto firms.
On X, Warren pointed to mounting evidence that hostile foreign actors are continuously using crypto to transfer billions, and that the CLARITY Act would only worsen that situation if passed as written. She particularly highlighted that Iranian groups have already routed an estimated $3.84 billion through CoinEx.
She noted:
The Clarity Act, as it’s currently written, would make this problem worse. Congress should be strengthening illicit finance standards, not creating new loopholes.
Senator Elizabeth Warren
But Senator Lummis fought hard against Warren’s criticism, saying that the Clarity Act provides protection rather than creating loopholes. She pointed out specific provisions—Sections 201, 303, and 305—that empower exchanges to freeze tainted assets, detail sanction provisions, and establish new anti-money laundering rules, and dismissed Warren’s warnings as completely groundless.
She wrote, “The Clarity Act has 16+ illicit finance safeguards, not loopholes.”
Nevertheless, Warren is not the only one to raise concerns about illicit finance and whether the legislation would help combat it or, instead, worsen the problem. Just last month, both law enforcement organizations and Catholic coalitions challenged Section 604 in separate letters, warning that its sweeping exemptions could weaken safeguards against criminal money movements.
Beyond concerns about illicit finance, the legislation has also come under fire for its other provisions and legislative process. For starters, banking groups have cautioned that it could give stablecoin issuers an unfair competitive advantage. The American Bankers Association said the changes could make them lose deposit yields as consumers embrace regulated stablecoins.
Additionally, other critics also pointed to potential loopholes in conflict-of-interest rules that could allow elected officials to benefit from digital asset activities. Earlier, Warren had advocated that the bill include provisions to halt the ongoing crypto profiteering by President Trump and his family.
She contended, “The crypto legislation heading to the Senate floor must prevent the president, vice-president, senior administration officials, members of Congress, and their families from profiting off the crypto industry,” said Warren. “If it does not, it will only turbocharge Donald Trump’s brazen crypto corruption.”
Her comments on Trump come after financial filings revealed World Liberty Financial made more than $500 million selling “governance tokens,” alongside another $600 million-plus pulled in by CIC Digital LLC from Trump-branded meme coins that debuted just days before he took office again
What are the chances the CLARITY Act gets approved this year?
Currently, the CLARITY Act’s odds of passage have slipped to 40% on Polymarket, weighed down by a compressed legislative schedule and renewed attention on President Trump’s $1.4 billion in crypto earnings. Earlier in June, the bill’s approval odds were as high as 64% on the platform.
The legislation needs at least 60 votes to advance in the Senate, and the tight congressional calendar only adds to the pressure. Lawmakers return from recess on July 13, giving lawmakers only a brief window before the August recess. Passing the Senate before then is crucial if the legislation is to be signed into law this year.
Aside from Polymarket’s odds, other platforms also show a downturn in the bill’s odds. Galaxy Research also lowered its legislative forecast for the CLARITY Act to 50% from 60% in June, noting the tight Senate floor time. Kalshi’s data also shows odds of 36-44% that the crypto market structure will pass this year.
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