160 Security Veterans Sound Alarm: Why the Senate’s Decision on the CLARITY Act Could Change National Security Forever

Concerns over illicit finance remain high after reported crypto-related criminal flows jumped 162% last year.

Over 160 former national security, intelligence, and law enforcement officials are pushing the U.S. Senate to advance the CLARITY Act, arguing that it would strengthen efforts to combat illicit finance in the crypto space.

The appeal was made in a letter addressed to Senate Majority Leader John Thune and Democratic Leader Chuck Schumer and was coordinated by the Blockchain Association.

Former Officials Back Crypto Market Rules

The industry group announced the initiative on X, calling digital asset market structure a “law enforcement and national security priority.” The letter argues that as crypto activity continues to grow worldwide, it is becoming really important for the U.S. to put in place a framework to regulate and oversee the industry.

According to the signatories, failing to do this could push more activity offshore and into opaque markets that are harder for U.S. authorities to monitor and investigate, creating gaps that can be exploited for illicit finance.

“It is critical for the United States that this activity occurs under American rules, with American oversight, and subject to American Law,” the letter states.

The ex-officials argue that such a move would improve national security, make law enforcement more visible, and give investigators more tools to fight financial crime, in turn, making it harder for criminal networks to launder money, evade sanctions, and defraud.

Meanwhile, data from the Bank Policy Institute (BPI) shows that illicit crypto flows surged 162% year-on-year last year. The group also said that the Clarity Act is not a deregulatory move but instead aims to improve enforcement, compliance accountability, and coordination across digital asset markets.

The legislation would extend the Bank Secrecy Act and impose compliance requirements on digital commodity brokers, dealers, and exchanges, as well as anti-money laundering obligations, reporting, and monitoring requirements.

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Additionally, the bill includes a Treasury-led information-sharing pilot program involving agencies like the DOJ, FBI, and DEA, as well as a permanent interagency working group dedicated to counter-illicit finance efforts.

Senate Meetings and a Town Hall

The Blockchain Association shared that its members and industry participants will be heading to Washington, D.C., for several meetings scheduled across 18 Senate offices.

The group is also planning a virtual town hall later this week to discuss how the CLARITY Act helps law enforcement and national security efforts. Expected to attend the gathering are Cynthia Lummis, House Majority Whip Tom Emmer, and Patrick Witt.

The letter ends with a call for the Senate to pass the CLARITY Act. Meanwhile, the bill has been approved recently by the Senate Banking Committee but is facing strong resistance from some lawmakers and bankers.