Senator Cynthia Lummis has reignited efforts to pass the CLARITY Act, a proposed law aimed at intensifying the United States’ response to crimes involving cryptocurrencies. The legislation is
Senator Cynthia Lummis has reignited efforts to pass the CLARITY Act, a proposed law aimed at intensifying the United States’ response to crimes involving cryptocurrencies. The legislation is designed to grant U.S. authorities broader power to combat criminal organizations such as North Korea’s Lazarus Group, which has been linked to major crypto thefts in recent years.
The CLARITY Act, formally known as H.R. 3633, would equip the U.S. Treasury with expanded authority to freeze cryptocurrency transactions linked to suspicious activity. According to Senator Lummis, “North Korea’s Lazarus Group and other malicious entities benefit from gaps in our financial regulations. The CLARITY Act will provide the Treasury Department with new sanctions tools and introduce a safe harbor for firms to freeze questionable transactions before funds are transferred.”
North Korea’s Lazarus Group and other bad actors thrive on gaps in our financial rules. The CLARITY Act gives Treasury new sanctions authority and a safe harbor for companies to freeze suspicious transactions before the money moves.
If enacted, the law would also grant legal immunity to cryptocurrency businesses, including exchanges and stablecoin issuers, that opt to freeze transactions deemed suspicious or associated with criminal actions. This provision is intended to encourage proactive steps among firms without fear of legal repercussions.
Beyond enforcement, the legislation seeks to extend the reach of Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) rules to cryptocurrency exchanges and decentralized finance (DeFi) platforms. By doing so, digital asset companies would have to follow compliance standards similar to those in traditional banking.
Mini dictionary: Lazarus Group, a state-backed North Korean hacking organization, has been accused of orchestrating some of the largest cyberattacks targeting cryptocurrency exchanges and financial institutions worldwide, using stolen funds to bypass international sanctions.
The CLARITY Act allocates significant resources for enforcement and investigation. Under its provisions, $150 million has been dedicated to the Financial Crimes Enforcement Network (FinCEN) to strengthen supervision over digital assets. Additionally, another $150 million in grants would enable state and local law enforcement agencies to better pursue cryptocurrency-related crimes.
RecipientAllocationPurposeFinCEN$150 millionRegulation of digital assetsState and local enforcement$150 millionInvestigation of crypto crimesThe Act would also establish an information-sharing network between the Department of Justice, the Department of the Treasury, and the Department of Homeland Security to improve the coordination of efforts to identify and disrupt illicit use of cryptocurrencies.
Senator Lummis formally introduced the updated CLARITY Act on July 22, 2026. The bill had previously passed the House of Representatives in July 2025 with a vote of 294 to 134. In May 2026, the Senate Banking Committee approved the bill by a margin of 15 to 9, reflecting a strong level of bipartisan support.
Lummis, who serves as a leading advocate for digital asset regulation in Congress, expressed that the passage of the CLARITY Act could represent the United States’ last major chance to establish comprehensive rules for cryptocurrencies as the decade draws to a close. She warned that further delays in regulation might result in other nations taking the lead in setting global standards for digital asset oversight.
Senator Lummis suggested that the CLARITY Act could be the nation’s final opportunity this decade to craft digital asset regulations, stressing potential risks if the U.S. falls behind international competitors.
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