CLARITY Act: Law Enforcement Group Shifts From Opposition to Neutral on DeFi Provision

The Major County Sheriffs of America (MCSA) has dropped its opposition to the DeFi provision in the CLARITY Act, shifting to a neutral stance, which represents significant progress towards advancing the crypto bill. The odds of President Trump signing the bill this year are climbing again amid this development, after dropping to new lows earlier this week.

MCSA Shifts To Neutral Stance On DeFi Provision In CLARITY Act

In a letter addressed to Senate Banking Committee Chair Tim Scott and Ranking Member Elizabeth Warren, the MCSA said it has shifted to neutral on the Blockchain Regulatory Certainty Act provision in the crypto bill, based on continued review. The provision notably protects crypto developers from liability for illicit activity committed by users on their decentralized platforms.

Opposition to the DeFi provision has been a major stumbling block to the CLARITY Act, with law enforcement groups arguing that it makes it harder to crack down on illicit finance. However, the MCSA said that it has continued to review the legislation and appreciates the Administration’s willingness to engage with law enforcement on the practical implications of the DeFi provision.

The law enforcement group further noted that the discussions have provided additional clarity regarding the Administration’s interpretation and anticipated implementation of the legislation. This development comes just days after the CLARITY Act got its first support from a law enforcement group.

As CoinGape reported, the National Organization of Black Law Enforcement Executives (NOBLE) endorsed the crypto bill. The group stated that provisions in the crypto bill “provide law enforcement with meaningful new capabilities while preserving longstanding criminal enforcement authorities.”

Proposed Amendments To The DeFi Provision

As part of its letter, the MCSA also proposed amendments to the DeFi provision, encouraging Congress to include a provision that gives state and local law enforcement a formal role in the Treasury study required under Section 309 and in any advisory bodies established under the CLARITY Act.

The group explained that state and local agencies should play a meaningful role in shaping any legislative, regulatory, and policy recommendations since they investigate the overwhelming majority of crypto crimes. The MCSA also said that the crypto bill should recognize that establishing a new federal framework must be accompanied by the resources state and local enforcement need to implement it effectively.

The odds of President Trump signing the CLARITY Act into law this year have climbed above 40% and currently stand at 44%, according to Polymarket data. However, ethical concerns remain another key issue, with Senator Gillibrand again calling for a ban on elected officials and their spouses from issuing or sponsoring crypto assets.

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