OPINION: Digital Asset Market Clarity Act Would Blindfold Investigators
Investigators rely on financial records to identify suspects, trace funds, and follow the money trail. Without this information, protecting victims, recovering stolen assets, and stopping criminal networks becomes nearly impossible. Crypto has made this far more difficult. Digital asset transactions often lack clear identity records, turning money tracing into a slow and frequently unsuccessful process. Without an identity clue in the chain, investigators may see the crime but cannot prove who is behind it or bring them to justice. According to a Chainalysis’ Crypto Crime Report, criminals laundered an estimated $51 billion through crypto in 2024 alone.
Law enforcement has long relied on money transmitter registration to obtain critical identity clues. Every financial service that moves money today is required to register. This requirement prevents criminals from easily evading detection and gives investigators essential tools to track and prosecute them. Without it, criminals can freely abuse financial services to launder money and move stolen funds with little risk of identification or accountability.
That same principle should guide Congress as it debates the Digital Asset Market Clarity (CLARITY) Act. However, the current version threatens to strip away basic tools law enforcement relies on to combat crime and financial abuse. Blockchain platforms would not have to register as money transmitters, and the bill includes broad exemptions for mixers and tumblers explicitly designed to mask identities.
This means criminals, drug cartels, serial fraudsters, and foreign adversaries could operate with far less risk of detection.
And that is why Nevada Democrat Senator Cortez Masto voted against the CLARITY Act in committee. Her fellow Senate Democrats should do the same.
Crypto and blockchain technology offer real opportunities for Nevadan’s financial future, but Congress should not pass laws that create loopholes for criminals. Money transmitter registration is a basic requirement that every other money-moving service must follow. Instead of carving out special exemptions for services used overwhelmingly by criminals, the CLARITY Act should hold blockchain platforms to the same standards.
If Congress wants digital assets to become part of the mainstream financial system, they must be safe, accountable, and transparent. Until these serious flaws are fixed, the only responsible choice is to reject the CLARITY Act.
-Steph Lopez is a former Nevada law enforcement investigator.
