CLARITY Act is the new legislation drafted by U.S. Senator Cynthia Lummis to help the country fight crypto crime more effectively. According to the document, the law will help deal with criminal activity that includes North Korea’s Lazarus Group. It is a state-sponsored cyber threat organization, which is responsible for some of the biggest cryptocurrency thefts in the recent years.
As part of this initiative, the Senator has proposed the closing of regulatory loopholes that have allowed cybercriminals to abuse the digital currency to bypass sanctions and launder money.
If the bill becomes a law, then the U.S. Treasury Department will be granted the right to freeze suspicious cryptocurrency transactions. The bill also offers a safe harbor from any kind of legal repercussions to the cryptocurrency companies that freeze suspicious transactions voluntarily before moving the funds.
According to Senator Lummis, criminals abuse the vulnerabilities of the current financial system and the CLARITY Act will give the Treasury the necessary instruments to impose sanctions on illicit crypto activity.
Apart from giving the sanctions tool, the CLARITY Act will extend Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) to the cryptocurrency exchanges and decentralized finance (DeFi) organizations. In other words, it will impose the same regulatory standards to the companies working with digital assets, as those used by financial companies.
The new bill provides $150 million to FinCEN to supervise the digital assets and $150 million of grants to the state and local police departments to investigate crypto crimes.
In addition to that, the CLARITY Act establishes an information sharing mechanism between the Department of Justice, Department of the Treasury, and Department of Homeland Security in order to better coordinate their efforts against illegal crypto activities.
Senator Lummis formally presented her updated version of the bill on July 22, 2026. Previously, it was passed in the House of Representatives in July 2025 (294-134 votes) and passed the Senate Banking Committee in May 2026 (15-9 votes). According to Senator Lummis, this may be the last opportunity of the U.S. government to regulate the digital assets within the decade, as further delay may allow other countries to dictate the global crypto standards.
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