CLARITY Act fight heats up as Witt defends crypto crime rules

White House adviser Patrick Witt defended the CLARITY Act as a law-enforcement-friendly crypto bill, even as lawmakers face a shrinking window to pass the legislation before midterm politics slow the process.

White House crypto adviser Patrick Witt used a Blockchain Association town hall to defend the CLARITY Act against criticism from law enforcement groups. The legislation strengthens regulatory oversight while supporting law enforcement efforts in the digital asset sector.

His comments came as debate over the bill’s anti-money laundering language grew sharper in Washington. Critics argue that parts of the bill could make it harder to trace illicit finance. Supporters say the measure would bring more crypto activity under federal supervision and give agencies clearer rules.

Lummis warns the Senate clock is closing

Senator Cynthia Lummis also urged lawmakers to move quickly. She said Congress may not get another clear chance to pass broad digital asset rules until 2030 if the current effort fails. That warning has turned the CLARITY Act into one of the most time-sensitive crypto bills in the Senate.

Recent market updates said Lummis now sees a vote before the August recess as more likely than a vote before July 4. The bill has already cleared the Senate Banking Committee in a 15-9 vote and has moved onto the Senate Legislative Calendar. Senate leaders have not set a floor vote date, leaving negotiators to keep working on changes. The timing keeps pressure on both parties.

DeFi protections remain a flashpoint

A key dispute centers on the Blockchain Regulatory Certainty Act language inside the latest Senate version. The provision seeks to protect non-custodial software developers from being treated as money transmitters when they do not control user funds or move assets for customers.

DeFi advocates support that protection, saying developers should not face liability for how others use open-source tools. Some lawmakers and law enforcement groups take a different view. They argue that loose language could weaken efforts to prosecute illicit fund transfers and recover stolen money.

Supporters race to build pressure

The Blockchain Association has added pressure by releasing a letter backed by 160 former national security, intelligence, and law enforcement officials. The group said the bill would support enforcement, improve oversight, and help the U.S. set digital asset standards.

The latest push also follows broader conflict between banks and crypto firms. JPMorgan analysts recently warned that the bill’s passage window is narrowing as Congress faces a crowded calendar. Stablecoin rewards, anti-money laundering rules, DeFi protections, and political ethics concerns remain central hurdles before the bill can reach President Donald Trump’s desk.