Senator Cynthia Lummis is making a final push for the CLARITY Act, arguing its three illicit-finance provisions can cut off North Korea's Lazarus Group from crypto markets. The bill's Senate floor vote is slipping toward the August recess, and Polymarket traders now price its passage in 2025 at just 33–37%, down from above 80% in February.
What the CLARITY Act actually does
The bill's core is Section 201, which extends Bank Secrecy Act and AML compliance obligations to crypto firms, exchanges, DeFi front ends, and crypto ATMs. Section 303 adds a new Treasury crypto sanctions authority aimed at Iran. Section 305 creates a safe harbor: exchanges can voluntarily freeze funds tied to suspicious activity before getting a court order, as long as they cooperate with law enforcement.
The Lazarus threat
Lazarus Group stole about $625 million from the Ronin Bridge in 2022. In February 2025, it executed the largest single crypto heist on record, taking $1.5 billion from Bybit. Treasury estimates the group has taken at least $3.4 billion in crypto since 2007, with proceeds routed toward North Korea's weapons programs. The group has also deployed operatives posing as remote IT workers to infiltrate crypto firms.
Critics call it a loophole
Senator Elizabeth Warren has called the Digital Asset Market Clarity Act a sanctions loophole rather than a sanctions tool. A former NSC Iran director also criticized the bill. Republicans added additional ethics language into a merged draft released July 22, but that hasn't shifted the odds much.
What happens next
The Senate floor vote is expected before the August recess, but the clock is tight. If the bill doesn't pass, Lummis will have to restart the process next year. The Polymarket odds suggest traders aren't betting on it.
