The Fraternal Order of Police, the American Bankers Association, former Utah AG Sean Reyes, and Senator Elizabeth Warren are all coordinating to kill Section 604 of the CLARITY Act before Thursday's Senate Banking Committee vote.
Section 604 is one provision: if you build open-source software and don't have unilateral control over users' funds, you are not a money transmitter. That's it. Prosecutors can still go after money launderers, drug traffickers, and terror financiers. Chain analysis, block explorers, and subpoenas still work. Nothing changes for law enforcement except the ability to prosecute developers for what their users do, which is the same theory that put the Samourai Wallet developers behind bars.
The FOP sent a letter claiming the provision would "strip prosecutors of the statutes used to track and take down criminals using digital assets." Reyes published an op-ed demanding BSA compliance for all crypto "platforms" without ever defining "platform." The ABA sent a letter to bank CEOs urging "immediate engagement" to fight the bill's stablecoin provisions. Over 100 amendments have been filed, including Warren's 40+ proposals and Senator Jack Reed's amendment to ban crypto as legal tender entirely.
None of them will answer the obvious question: Is a car manufacturer liable when a drunk driver kills someone? Is a hammer company liable when someone uses their product as a weapon? The principle that tool makers are not liable for what users do with their tools is foundational to free society. It's why we have an open internet. It's why Linux exists.
The real tell is the BSA itself. Law enforcement intercepts roughly 0.1% of global money laundering flows through KYC/AML compliance. The system was never designed to stop criminals. It was designed to build a surveillance infrastructure that monitors everyone while mandating the creation of honeypots containing your most sensitive financial data in a world where AI models are finding zero-day vulnerabilities at an exponentially growing clip.
Code is speech. The Senate Banking Committee votes Thursday. Call your senator.
Section 604 is one provision: if you build open-source software and don't have unilateral control over users' funds, you are not a money transmitter. That's it. Prosecutors can still go after money launderers, drug traffickers, and terror financiers. Chain analysis, block explorers, and subpoenas still work. Nothing changes for law enforcement except the ability to prosecute developers for what their users do, which is the same theory that put the Samourai Wallet developers behind bars.
The FOP sent a letter claiming the provision would "strip prosecutors of the statutes used to track and take down criminals using digital assets." Reyes published an op-ed demanding BSA compliance for all crypto "platforms" without ever defining "platform." The ABA sent a letter to bank CEOs urging "immediate engagement" to fight the bill's stablecoin provisions. Over 100 amendments have been filed, including Warren's 40+ proposals and Senator Jack Reed's amendment to ban crypto as legal tender entirely.
None of them will answer the obvious question: Is a car manufacturer liable when a drunk driver kills someone? Is a hammer company liable when someone uses their product as a weapon? The principle that tool makers are not liable for what users do with their tools is foundational to free society. It's why we have an open internet. It's why Linux exists.
The real tell is the BSA itself. Law enforcement intercepts roughly 0.1% of global money laundering flows through KYC/AML compliance. The system was never designed to stop criminals. It was designed to build a surveillance infrastructure that monitors everyone while mandating the creation of honeypots containing your most sensitive financial data in a world where AI models are finding zero-day vulnerabilities at an exponentially growing clip.
Code is speech. The Senate Banking Committee votes Thursday. Call your senator.
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