Ex-defense chief calls CLARITY Act security bill

TLDR

Former US Defense Secretary Mark Esper is urging the Senate to pass the CLARITY Act, calling it a national security bill that would close crypto loopholes used by foreign adversaries.

1. Esper argues weak US digital asset rules let China and North Korea exploit crypto to undermine US dollar power and evade sanctions.
2. The CLARITY Act would extend Patriot Act tools to digital assets and create a federal framework splitting oversight between the SEC and CFTC.
3. A key Senate vote is set for 15 Sep, with passage uncertain and major implications for exchanges, DeFi, stablecoins and cross?border flows.

Deep Dive

1. What Esper Is Arguing

Mark Esper, a former US Secretary of Defense and member of Coinbases advisory council, wrote that the CLARITY Act is not merely a financial services bill but also a national security bill that should be passed urgently, highlighting China and North Korea as primary threats to US financial power in his op-ed summary.

He points to Chinas state-directed payment systems designed to sidestep US oversight, and to North Koreas Lazarus Group, which has used major crypto hacks and mixing infrastructure to bypass sanctions, as concrete examples of why digital asset rules matter for national security.

Espers core claim is that without clearer US crypto regulation, adversaries can build parallel payment rails and exploit regulatory gaps, eroding US visibility into global flows and weakening sanctions enforcement.

2. How CLARITY Reshapes Crypto

The CLARITY Act (Digital Asset Market Clarity Act, H.R. 3633) is a 600-plus page market?structure bill that would define which digital assets are securities or commodities and formally divide oversight between the SEC and CFTC, creating the first comprehensive US federal framework for crypto markets as outlined in a Senate-focused explainer.

A central feature is expanding Treasurys special measures authority under Section 311 of the USA Patriot Act to digital assets, allowing it to restrict or condition transfers involving foreign platforms, mixers, or jurisdictions deemed money?laundering or sanctions risks.

Supporters say this would give the US better tools to target illicit finance through crypto while keeping innovation onshore, but critics warn it could concentrate power in federal agencies, reshape how DeFi, mixers, and offshore venues interact with US users, and raise compliance burdens for smaller players.

3. Political Odds And Market Impact

Senate Majority Leader John Thune has filed cloture, scheduling a procedural vote on the CLARITY Act for 15 Sep at 2:15 pm ET, a test of whether the bill can move to full floor debate amid ethics and illicit?finance disputes described in a legislative rundown.

Forecasts are cautious: research desks have cut passage odds for 2026 to around one?third, and prediction markets price a low probability the bill becomes law this year, reflecting tight timelines, partisan concerns over ethics provisions, and opposition from some banking and consumer?protection groups.

For crypto users, the near?term impact is primarily about positioning: regulatory clarity could over time lower legal risk for mainstream assets and venues, but failure or a heavily amended bill would prolong todays patchwork regime and keep enforcement discretion high.

Conclusion

Espers intervention reframes the CLARITY Act as a national security tool, not just a crypto industry wish list, by tying digital asset rules to sanctions, illicit finance and the future of dollar?based influence.

Whether or not the bill passes in 2026, the push signals that US crypto policy will increasingly be shaped at the intersection of security and finance, with implications for which platforms, assets and architectures remain viable for US?linked users over the coming years.