The pushback centers on concerns that the provision may create regulatory gaps and complicate investigations and prosecutions tied to illicit activity, The Block said.
U.S. law enforcement groups are pushing back against the Clarity Act, focusing on concerns that Section 604 could open gaps in oversight and make it harder to investigate and prosecute illicit activity. The objections, reported by The Block, point to a familiar regulatory debate in crypto: whether changes meant to clarify rules could also reduce visibility for agencies trying to police financial crime.