CLARITY Act Gains Momentum After MCSA Shifts to Neutral

The Digital Asset Market CLARITY Act (H.R. 3633) has gained fresh momentum after the Major County Sheriffs of America (MCSA) softened its stance on the legislation, shifting from opposition to a neutral position following discussions with lawmakers and the administration. The move removes one of the most significant law enforcement objections that had weighed on the bill’s progress in the Senate.

MCSA said it changed its position after receiving additional clarification on Section 604, also known as the Blockchain Regulatory Certainty Act, which outlines protections for non-custodial software developers and blockchain infrastructure providers. While the organization stopped short of endorsing the legislation, it said the bill could be strengthened in a way that supports both responsible innovation and effective law enforcement.

MCSA Seeks Amendments Instead of Opposing the Bill

In a letter sent to Senate Banking Committee Chairman Tim Scott and Ranking Member Elizabeth Warren, MCSA formally notified lawmakers that it was withdrawing its opposition to the legislation. The organization said further discussions over Section 604 addressed some of its concerns regarding how the provision would be interpreted and implemented.

The policy shift is closely tied to protections for decentralized finance (DeFi) developers. MCSA said the additional clarification reduced concerns that non-custodial developers could receive blanket immunity from law enforcement investigations simply because they provide software or infrastructure.

Rather than opposing the legislation, MCSA is now urging Congress to adopt several targeted amendments, including:

• Including state and local law enforcement in Treasury-led digital asset studies.
• Providing representation for law enforcement on digital asset advisory committees.
• Increasing funding for blockchain analytics, forensic tools, and investigator training.

Law Enforcement Concerns Remain

Although MCSA has adopted a neutral position, the organization stressed that digital assets continue to be used in criminal activities including ransomware attacks, fraud, human trafficking, child exploitation, organized retail theft, and terrorism financing. It said these risks should be addressed as lawmakers continue refining the legislation.

Industry analysts believe the removal of one of the bill’s most visible law enforcement objections improves its political outlook in the Senate. However, negotiations remain ongoing, and the legislation must still secure sufficient bipartisan support before it can advance to final passage.

Why the CLARITY Act Matters

The CLARITY Act is considered one of the most significant U.S. crypto market structure proposals because it would establish a comprehensive federal regulatory framework for digital assets. Among its key provisions, the legislation would clarify regulatory jurisdiction between the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), while creating a clearer compliance framework for crypto exchanges, intermediaries, and blockchain service providers.

The bill also incorporates the Blockchain Regulatory Certainty Act, which aims to protect certain non-custodial blockchain developers and infrastructure providers from being classified as money transmitters when they do not control customer assets.

While the CLARITY Act still faces the Senate approval process, MCSA’s shift from opposition to neutrality is widely viewed as a constructive development that could improve the legislation’s prospects as lawmakers continue negotiations.

In March, SEC Chairman Paul Atkins introduced a new token taxonomy framework to provide greater regulatory clarity for digital assets. The framework outlines how different crypto tokens will be classified under U.S. securities laws.