Four major U.S. law enforcement agencies sent a joint letter to the DOJ and the White House, stating that Section 604 of the Clarity Act could create loopholes in crypto crime investigations.

The National District Attorneys Association, National Association of Assistant U.S. Attorneys, International Association of Chiefs of Police, and National Sheriffs’ Association jointly sent a letter to the U.S. Department of Justice and White House on Tuesday, warning that Section 604 of the Digital Asset Market Structure Clarity Act has serious law enforcement loopholes that could make it difficult for authorities to investigate and prosecute crypto-related crimes. The letter notes that Section 604 contains broad exemption clauses that could allow individuals or entities facilitating crypto asset transfers to evade regulatory accountability, undermining long-standing investigative and law enforcement authorities. The four organizations emphasized their concerns are not targeted at developers who merely write or publish software code, but rather at broad exemptions that could shield illegal activities. The core of the controversy is Section 604, also known as the Blockchain Regulatory Certainty Act (BRCA) provision. Originally a standalone bill, it was later incorporated into the Clarity Act, designed to provide a safe harbor for non-custodial developers by clarifying they are not money transmitters. Law enforcement groups argue this would create barriers to crypto crime investigations. Additionally, the letter points out that multiple other provisions of the bill would "reduce transparency, weaken accountability mechanisms, and create gaps in anti-money laundering frameworks." On the same day, nearly 100 Catholic leaders representing parishes across the U.S. also warned the bill could undermine protections against human trafficking. In response, White House crypto advisor Patrick Witt maintained the Clarity Act is a "regulation-friendly and law enforcement-friendly" bill, stressing the U.S. must proactively set standards or risk adopting rules dictated by other countries.