Former US Defense Secretary Esper Urges Senate to Pass CLARITY Act as National Security Priority
Key Takeaways
- •The CLARITY Act, which would establish a market structure framework clarifying SEC and CFTC jurisdictions over digital assets, has passed the House and awaits a Senate vote expected on September 15.
- •Former Defense Secretary Mark Esper contends that inadequate cryptocurrency oversight creates national security vulnerabilities that adversarial nations such as China and North Korea could exploit.
- •The bill includes a provision extending Treasury's authority under Section 311 of the USA PATRIOT Act to designate foreign jurisdictions or transactions as primary money laundering concerns.
- •Esper cited North Korea's state-sponsored Lazarus Group, linked to multiple cryptocurrency heists including the $620 million Ronin Network theft in 2022, as a specific threat the legislation would help address.
- •Senate Majority Leader John Thune filed cloture on Saturday to advance the CLARITY Act to the Senate floor for consideration.
Former US Secretary of Defense Mark Esper has called on the Senate to pass the CLARITY Act, framing the digital asset legislation as essential to national security rather than merely a financial regulatory measure. The bill, which would establish a market structure framework clarifying the respective jurisdictions of the Securities and Exchange Commission and the Commodity Futures Trading Commission over digital assets, has already cleared the House and now awaits Senate action.
In an op-ed published in the Financial Times on Saturday, Esper argued that inadequate cryptocurrency oversight creates vulnerabilities that adversarial nations such as China and North Korea could exploit to weaken American financial influence.
Esper, who served as defense secretary from 2019 to 2020 under President Donald Trump and currently sits on the Coinbase Global Advisory Council, warned that Beijing is already investing in state-directed payment systems — including its digital yuan — designed to bypass US oversight and diminish the dollar's central role in global finance.
"I have long argued that China is the greatest strategic threat of our lifetime," Esper wrote.
He also emphasized that the CLARITY Act would equip the United States with stronger tools to close cryptocurrency-related loopholes that North Korean actors, including the Lazarus Group, have used to evade US financial controls. The Lazarus Group is a North Korean state-sponsored hacking operation that has been linked to multiple high-profile cryptocurrency heists, including the $620 million Ronin Network bridge theft in 2022.
Esper highlighted a specific provision of the bill, stating: "The Act also extends the Treasury's potent special-measures authority under section 311 of the USA Patriot Act — one of our sharpest weapons against rogue actors."
Section 311 of the USA PATRIOT Act authorizes the Secretary of the Treasury to designate foreign jurisdictions, financial institutions, or classes of transactions as being of "primary money laundering concern," allowing the US government to impose enhanced reporting requirements or restrict access to the American financial system.
The Senate is expected to vote on the CLARITY Act on September 15. Senate Majority Leader John Thune filed cloture on Saturday to advance the legislation to the Senate floor for consideration.
Esper concluded with a direct appeal: "This is why the Clarity Act, now before the Senate, is not merely a financial services bill. It is also a national security bill, and it should be understood as such and passed with urgency."