Law enforcement backs CLARITY Act amid stalemate

TLDR

U.S. police and law enforcement groups now support the Digital Asset Market Clarity (CLARITY) Act even as the crypto bill remains stalled in the Senate.

1. Major police organizations have endorsed the CLARITY Act after AML and investigative powers were strengthened, reversing earlier opposition.
2. Despite law enforcement backing, the bill is stuck on ethics rules, stablecoin yields, and DeFi oversight, with prediction markets putting passage odds below 40 percent.
3. For crypto users and platforms, the stalemate preserves regulatory uncertainty, so the key things to watch are ethics negotiations and any fallback SEC rulemaking.

Deep Dive

1. Law Enforcement Shift

The Major Cities Chiefs Association, representing big-city police leaders, has endorsed the CLARITY Act after amendments added stronger tools to combat digital asset crime, including tougher Bank Secrecy Act coverage for intermediaries and new Treasury AML powers, as detailed in the associations letter and coverage of its endorsement by CoinMarketCaps community news.

Earlier critics like the Fraternal Order of Police have also moved into the supportive camp after language was clarified around the related Blockchain Regulatory Certainty Act, which confirms that non?custodial software developers are not treated as money transmitters while keeping exchanges and other custodial players fully within AML rules.

Taken together, these endorsements signal that mainstream law enforcement now sees the bill as enhancing, not undermining, their ability to pursue fraud, money laundering, and other crypto crimes.

2. Why The Bill Is Stalled

Even with police backing, the CLARITY Act remains stuck in the Senate. The House passed the bill in July 2025 and the Senate Banking Committee advanced it by a 15?9 vote in May 2026, but leadership has not scheduled a floor vote. Treasury Secretary Scott Bessent has publicly urged immediate passage and warned that further delay pushes the industry overseas.

The main friction points are political and ethical, not AML. Senators are fighting over ethics rules that would limit federal officials crypto activities, especially provisions aimed at President Trump and his family, as described in coverage of the Tillis?Gallego ethics compromise sent to the White House. There are also disputes over stablecoin interest, DeFi oversight, and disclosure obligations.

JPMorgan analysts note that prediction markets now price passage odds around 37 percent on Kalshi and 26 percent on Polymarket, highlighting a real risk the bill slips to a later Congress and becomes effectively dormant.

3. Market Impact And What To Watch

Substantively, the CLARITY Act would draw clearer lines between digital commodities under the CFTC and digital securities under the SEC, tighten customer protections, and formalize AML standards for crypto intermediaries. Industry groups including the Consumer Technology Association and firms like BlackRock, Coinbase and Ripple have publicly backed the bill, arguing it would unlock investment and onshore liquidity.

In the near term, the stalemate keeps the U.S. in a regulation by enforcement regime, where major platforms must navigate overlapping SEC and CFTC actions rather than a unified statute. That tends to dampen institutional appetite and encourages some projects to base key operations in jurisdictions with clearer rules.

Conclusion

Law enforcement backing removes one of the bills biggest credibility questions, showing that tougher crypto rules and innovation can coexist. The core obstacles now lie in political ethics fights and disagreements over stablecoin and DeFi treatment. For the crypto ecosystem, the outcome will shape whether U.S. market structure is defined by a single statute or by fragmented agency enforcement, with implications for institutional adoption, venue choice, and where new projects decide to build.