Senator Cynthia Lummis has placed national security at the center of her push for the Digital Asset Market Clarity Act, arguing that the bill’s core illicit-finance provisions offer a direct way to cut off North Korea’s Lazarus Group from crypto markets.

The CLARITY Act is primarily a digital-asset market structure bill, but Lummis is emphasizing provisions that would expand compliance duties and enforcement tools around crypto platforms. That framing matters because the Lazarus Group cases cited by U.S. officials typically involve stolen funds moving across exchanges, bridges, wallets, and other crypto infrastructure before investigators can recover them.

Her argument comes as the bill’s Senate floor vote has slipped toward the August recess. On Polymarket, traders have priced the likelihood of passage in 2026 at 33%–37%, down from more than 80% in February. Polymarket odds reflect activity on a prediction market and are not an official legislative forecast, but they show how traders are reading the bill’s timing and political momentum.

Three CLARITY Act Provisions Cited by Lummis

Lummis has focused on three sections of H.R. 3633 in making her case. Section 201 would extend Bank Secrecy Act and anti-money-laundering compliance obligations to crypto firms, exchanges, DeFi front ends, and crypto ATMs. Section 303 would add a new Treasury Department crypto sanctions authority aimed at Iran.

Section 305 would create a safe harbor allowing exchanges to voluntarily freeze funds tied to suspicious activity before obtaining a court order, provided they cooperate with law enforcement.

That safe harbor is central to Lummis’s argument. Lazarus moves stolen funds quickly across blockchains and through mixers, while the current legal framework gives exchanges limited incentive to act unilaterally. Section 305 is intended to narrow that window by removing liability for platforms that freeze fast-moving suspicious transactions.

“North Korea's Lazarus Group and other bad actors thrive on gaps in our financial rules. The Clarity Act gives Treasury new sanctions authority and a safe harbor for companies to freeze suspicious transactions before the money moves.” — Senator Cynthia Lummis (@SenLummis), July 26, 2026

On July 26, Lummis made the same case in a public statement on X, saying North Korea’s Lazarus Group and other bad actors benefit from gaps in financial rules and that the CLARITY Act would give Treasury new sanctions authority while allowing companies to freeze suspicious transactions before funds move. The cited X post is available at https://x.com/SenLummis/status/2081463313045815759.

Lazarus Group’s Crypto Theft Record

The scale of the problem cited by Lummis is substantial. Lazarus Group stole roughly $625 million from the Ronin Bridge in 2022, targeting infrastructure used by Axie Infinity.

In February 2025, the group carried out what was described as the largest single crypto heist on record, taking $1.5 billion from Bybit. Treasury estimates that Lazarus has stolen at least $3.4 billion in crypto since 2007, with proceeds routed toward North Korea’s weapons programs.

The group has also deployed operatives posing as remote IT workers to infiltrate crypto companies directly. That type of insider-access threat is a vector that corporate-level AML and KYC controls are designed to detect. Lummis has framed Section 201’s extension of BSA obligations as a response to that kind of attack surface.

The proposal has faced opposition. Senator Elizabeth Warren has criticized the Digital Asset Market Clarity Act, calling it a sanctions loophole rather than a sanctions tool. The source also references objections from a former NSC Iran director, without providing further detail. Republicans have already added ethics language to a merged draft released on July 22, leaving the next test in the Senate focused not only on market-structure rules but also on whether lawmakers accept Lummis’s national-security case for faster crypto enforcement tools.