- The Alliance to End Human Trafficking urged Senate leaders to revisit a DeFi provision in the CLARITY Act.
- Critics argue Section 604 could weaken safeguards against illicit finance and human trafficking.
- Industry groups continue supporting the bill as lawmakers work toward a potential Senate vote.
The CLARITY Act faces renewed scrutiny after the Alliance to End Human Trafficking urged Senate leaders to reconsider Section 604, a provision that would shield decentralised finance software developers from money transmitter requirements and liability for user activity.
The intervention comes as Senate lawmakers continue negotiations on the crypto market structure bill ahead of a narrowing legislative calendar before the August recess.
“At a moment when Congress continues bipartisan efforts to strengthen anti-trafficking protections, policymakers should avoid creating unintended loopholes that could undermine those efforts,” said the Alliance to End Human Trafficking.
The organisation argued that Section 604, which incorporates the Blockchain Regulatory Certainty Act, could create regulatory gaps that make it more difficult for authorities to monitor financial activity linked to crimes such as human trafficking and money laundering.
The debate adds to existing disputes over ethics provisions, prediction markets and decentralised finance oversight, while industry groups continue lobbying in favour of the legislation; according to Polymarket, the probability of the bill becoming law before the end of 2026 stood at 42%.
Recent comments from Senator Cynthia Lummis suggested lawmakers had completed roughly 80% to 85% of negotiations, although several key provisions remain unresolved.
The Digital Chamber said it recently met with lawmakers, including Senator Lummis, to advocate for the bill, while Senate leaders continue weighing whether the legislation can advance to a final vote this year.
