The National Fraternal Order of Police, the largest U.S. police union, has come out against Section 604 of the CLARITY Act, arguing the provision would strip prosecutors of key tools to track crypto-related crime. In a letter sent this week to Senate Banking Committee Chairman Tim Scott and Ranking Member Elizabeth Warren, FOP President Patrick Yoes said the developer shield would hamper enforcement. The markup is set for Thursday.
The core complaint
Section 604 is meant to protect open-source developers — people who build privacy tools, non-custodial wallets, or mixing software — from being classified as money transmitters based on how users deploy their code. The FOP doesn't object to owning or trading digital assets. But Yoes argued the exemption goes too far, letting developers off the hook even when their tools end up central to criminal schemes. The union wants to preserve existing enforcement pathways.
What the bill's backers say
Supporters of the CLARITY Act, including several Republicans on the Banking Committee, say Section 604 is about shielding innovators from liability for others' actions. Without it, they argue, small teams building code could face crushing regulatory risk. But the FOP's letter flips that script, warning the provision could tie investigators' hands just as crypto-related crime is drawing more scrutiny.
Political odds
No Democrats on the Senate Banking Committee are expected to back the CLARITY Act. Analysts predict the bill will advance on a party-line vote. Meanwhile, banking trade groups have their own gripe with the legislation — they oppose the stablecoin-rewards provision, arguing it could let crypto firms pull deposits out of insured banks. That's a separate fight.
What happens Thursday
The committee's markup is scheduled for May 21. If the CLARITY Act clears that hurdle, it heads to the full Senate floor — where its fate is far from certain given the bipartisan opposition on key pieces.
