Patrick Witt, President Trump's top crypto adviser, shot down a proposal from law enforcement groups to amend the CLARITY Act this week, calling it 'not even close' to meeting the administration's expectations. The proposal, backed by Democrats, would have removed provisions that protect crypto developers from criminal prosecution — a key sticking point in the ongoing debate over the bill. Witt's blunt rejection signals the White House is dug in on shielding non-custodial developers, even as critics warn the current language could enable financial crime.
Witt's blunt rejection
The proposal, which focused on the Blockchain Regulatory Certainty Act (BRCA), was meant to bridge the gap between law enforcement concerns and the administration's push for innovation. But Witt wasn't having it. He told the groups the changes were 'not even close' to what the White House would accept. The Trump administration wants to protect developers who don't hold customer funds, arguing that broad criminal liability would stifle innovation. Critics say that same protection could create a safe harbor for bad actors.
Police groups flip their stance
The Fraternal Order of Police, the largest U.S. police organization, dropped its objections to the CLARITY Act after previously raising concerns about the BRCA. They're now backing the bill, alongside the National Organization of Black Law Enforcement Executives and the Federal Law Enforcement Officers Association. That's a notable shift — law enforcement was initially a major roadblock. Over 160 former national security, intelligence, and other officials also wrote to the Senate in support, arguing the bill would actually strengthen efforts to combat illicit finance in crypto.
New York's top cop pushes back
New York Attorney General Letitia James isn't convinced. She stated the CLARITY Act could weaken state enforcement against crypto fraud by limiting the state's ability to hold digital asset firms accountable. Her office has been aggressive on crypto cases, and she sees the bill as a threat to that work. The tension between state and federal authority is a recurring theme in the crypto regulatory landscape.
Senator Catherine Cortez Masto claimed the latest revision was the result of 'productive negotiations' with law enforcement, the White House, and Treasury. Witt's rejection suggests those talks aren't as productive as she thinks. The bill remains in play, but the administration's red line on developer protections is clear. Expect more back-and-forth as the Senate weighs the next move.
