The National Fraternal Order of Police, the nation’s largest organization representing law enforcement officers, has expressed concerns about a particular provision in the CLARITY Act, and communicated these concerns to legislators in a recent letter.
In a letter signed by Fraternal Order of Police President Patrick Yoes, the group stated its strong opposition to Section 604. This section would reportedly exclude some developers and service providers from being classified as money transmitters.
CLARITY Act Section 604 Becomes A Flashpoint
According to posts on social media, Yoes contacted the leaders of the Senate Banking Committee – Chairman Tim Scott and Ranking Member Elizabeth Warren – to explain that a particular part of the legislation, Section 604, could remove important legal tools currently used by law enforcement and prosecutors to investigate and prosecute crimes involving cryptocurrency and other digital assets.
The police union argues that taking away these tools would actually help criminals make money from illegal activities. The main disagreement revolves around how the law would affect the creators of cryptocurrency software.
According to the TFTC, Section 604 is particularly important for open-source developers. It would protect them from being considered money transmitters – and facing legal consequences – based on how *users* utilize their software, not on whether the developers themselves ever managed any money.
The agency cautions that without proper safeguards, developers creating specific privacy tools, self-custody wallets, or software that obscures transactions could face legal consequences, even if they don’t directly handle user funds.
The agency determined the main issue isn’t whether the FOP is okay with digital asset trading, but rather who should be legally accountable for it.
The FOP seems unconcerned with people simply owning or trading digital assets. Their main concern is maintaining the ability to take action against those who create the tools used for illegal activities involving those assets.
No Democrats Expected To Support
Even though Section 604 is still being debated, the CLARITY Act has other unresolved issues. As Bitcoinist noted on Monday, the Senate Banking Committee plans to review the bill on Thursday, but the current draft is already receiving criticism.
One major concern with the bill is its plan to offer rewards in the form of stablecoins. Banking industry groups have expressed opposition, claiming this could allow crypto companies excessive leeway and potentially lead customers to move their money out of traditional, insured banks.
Crypto In America also found that experts predict the CLARITY Act will likely pass with support only from Republicans, as no Democrats on the Senate Banking Committee are anticipated to vote for it.
Featured image created with OpenArt, chart from TradingView.com
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2026-05-13 01:59