The Facts: The CLARITY Act Protects Main Street, Unleashes Responsible Innovation, and Cracks Down on Fraud and Money Laundering

FACT: The CLARITY Act Cracks Down on Fraud and Money Laundering

The Banking Committee’s market structure bill takes a hardline approach to fraud and money laundering while protecting American investors in the marketplace.

The bill applies Bank Secrecy Act regulations to digital asset brokers, dealers, and exchanges, requiring anti-money laundering and countering terrorist financing programs, suspicious activity monitoring and reporting, customer identification programs, and compliance with sanctions laws.

The CLARITY Act also strengthens law enforcement capabilities by creating a targeted safe harbor for digital asset service providers and permitted payment stablecoin issuers to temporarily pause suspicious transactions at the request of law enforcement.

The bill requires registration of digital asset kiosks, including customer warnings, receipts, anti-fraud policies, risk monitoring, compliance officers, fraud detection, holding periods, and withdrawal limits.

The legislation also creates a new “Special Measure 6” authority allowing the Treasury Department to act swiftly against foreign jurisdictions, institutions, or transaction types that pose a primary money laundering concern involving digital assets.

In addition, the CLARITY Act establishes risk-management standards for digital asset intermediaries, requires focused studies and reporting on digital asset mixers and tumblers, illicit finance risks, cybersecurity vulnerabilities, and national security threats, authorizes increased funding for FinCEN, and creates a pilot program to improve information sharing between the private sector and federal law enforcement.

Bottom line: The bill closes significant gaps in fraud and money laundering while preserving marketplace integrity.

For the full fact sheet, click here.