The National Sheriffs' Association has informed lawmakers that it will no longer oppose the CLARITY Act, ending months of resistance just weeks before a scheduled Senate vote on the cryptocurrency industry's top legislative priority. The bill, which passed the House in July 2025, would establish a federal framework dividing oversight of digital assets between the SEC and CFTC based largely on how decentralized a network is—a split the industry has long sought clarity on.

NSA shifts to a neutral stance

In a signed letter to Senate Majority Leader John Thune and Minority Leader Chuck Schumer, National Sheriffs' Association president Sheriff Troy Wellman and executive director and CEO Justin Smith explained that the organization would no longer oppose the bill. The shift was reportedly driven by "the complexity of the legislation and the number of important details that remain under consideration." The NSA will now maintain a neutral position on the issue.

Other law enforcement bodies, including national police and federal groups, had already backed the bill's control-based approach. The NSA's earlier opposition rested on its argument that the measure would weaken efforts to prosecute illicit finance.

That stance had carried political weight. Democrats such as Nevada Senator Catherine Cortez Masto cited it when voting against advancing the CLARITY Act out of the Senate Banking Committee. Masto entered letters from six groups into the record, including the National Sheriffs' Association, the National District Attorneys Association, and the International Association of Chiefs of Police, all of which argued the draft failed to address their concerns. With the NSA's new position, that pressure point loses some of its force.

What is Section 604?

One of the biggest remaining obstacles to passing the CLARITY Act is Section 604, a provision that protects software developers from being treated as though they control user funds simply for writing code.

Supporters of the section, including Senator Ron Wyden (D-OR), argue the protection is needed to prevent developers from relocating overseas because of unclear laws, pointing to cases such as the Tornado Cash developer as evidence of the problem.

The Blockchain Association, in an eight-page letter to Thune and Schumer dated August 3, argued that the provision clearly separates people who control customer assets from developers who supply neutral tools, and said it would not apply to anyone with control over user funds or the ability to transact on their behalf.

Critics, however, worry the protection is too broad and could allow crypto mixers and tumblers to escape anti-money-laundering rules. Prosecutors and police groups have argued it would make it harder to track money tied to fraud, ransomware, and sanctions evasion.

Presidential conflicts and the path to a vote

Another open issue is how to limit a sitting president's ability to profit from digital assets. More than $1.4 billion in crypto-linked income was tied to President Donald Trump's family ventures in 2025, including World Liberty Financial and the Trump meme coin. Lawmakers argue the bill's ethics language is not strong enough.

A cloture vote is set for September 15 and requires 60 votes to pass. Republicans hold 53 seats, meaning at least seven Democrats would need to cross over. How negotiations over Section 604 and the ethics provisions resolve in the coming weeks will determine whether the Senate takes a final vote on the first comprehensive US crypto market-structure law.

Sources: Semafor, Cortez Masto Senate statement