Senator Cynthia Lummis said the Digital Asset Market Clarity Act would help close financial-rule gaps that North Korea’s Lazarus Group and other illicit actors use to move stolen crypto funds. She argued that the legislation would give the US Treasury Department new sanctions powers while giving exchanges legal protection when they freeze suspicious funds before they can be transferred.

The Digital Asset Market Clarity Act, widely known as the CLARITY Act, is the crypto industry’s central market-structure bill. It cleared the House in 2025 and advanced through a Senate committee this year, but it is still waiting for a vote by the full Senate. The debate now links two issues that have often moved together in Congress: clearer rules for digital-asset firms and stronger tools for illicit-finance enforcement.

Where the Bill Stands

The bill, formally H.R. 3633, passed the House earlier this month with bipartisan support. The Senate Banking Committee advanced the measure in May. Senate Republicans then released a merged draft on July 22 that adds ethics rules and language focused on illicit finance.

In a July 26, 2026 post on X, Lummis wrote: “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.” https://x.com/SenLummis/status/2081463313045815759?ref_src=twsrc%5Etfw

Lummis has cited three specific sections of the bill in response to criticism. Senator Elizabeth Warren, for example, has described the legislation as a sanctions loophole.

Section 201 would apply Bank Secrecy Act (BSA) and anti-money-laundering (AML) rules to crypto firms. Section 303 would add sanctions authority aimed at Iran. Section 305 would allow exchanges to freeze funds linked to suspicious activity, provided they cooperate with law enforcement. The safe-harbor provision is central to Lummis’s argument because crypto transfers can move quickly once initiated, while firms also face legal risk when they block customer assets without a clear statutory basis.

Senate Majority Leader John Thune said Thursday that he does not expect a final vote before the August recess, though he still wants floor debate to begin. Republicans hold 53 Senate seats and need roughly seven Democratic votes to meet the 60-vote threshold, making bipartisan support necessary even if most Republicans back the measure.

Polymarket traders now price the bill’s passage in 2026 at roughly 33% to 37%, down from above 80% in February. If the vote slips, the bill would move closer to the midterm-election calendar, when both floor time and political appetite tend to narrow.

Lazarus Group’s Record of Crypto Heists

Lazarus Group has used crypto theft for years to fund North Korea’s weapons programs. The group stole roughly $625 million from Ronin Bridge in 2022. Ronin Bridge powers Axie Infinity, the blockchain-based game.

The group also stole $1.5 billion from Bybit in February 2025, the largest crypto heist on record. The Treasury Department estimates that Lazarus has stolen at least $3.4 billion in crypto since 2007.

Hackers linked to North Korea have also posed as remote IT workers to infiltrate crypto companies directly. Those incidents give lawmakers concrete examples for a debate that is otherwise framed around statutory language, compliance obligations, and the balance between market access and enforcement.

Senate Timing

Industry groups continue to push for a Senate vote before the August recess. Some Democratic holdouts, however, want stronger ethics language covering officials’ crypto holdings before they commit support.

Lummis has framed the bill’s illicit-finance provisions as a response to real threats rather than a political talking point. Whether that argument is enough to win over holdouts, or whether the bill slips into September, could determine whether Congress passes crypto rules in 2026.