Sheriffs Go Neutral on CLARITY Act, Easing Pressure on Senate Vote

Sheriffs’ Association Moves From Opposition to Neutral

The National Sheriffs’ Association (NSA) changed its position on the CLARITY Act to neutral in a Sept. 3 letter, citing the legislation’s complexity and unresolved details. The letter was addressed to Senate Majority Leader John Thune (R-SD) and Senate Minority Leader Charles Schumer (D-NY) and signed by NSA President Sheriff Troy Wellman and Executive Director and CEO Justin Smith. The shift removes a prominent law enforcement objection before the bill’s scheduled Senate vote.

The association stated that stepping back would allow lawmakers to continue developing a regulatory framework for digital asset markets. The group wrote:

“At this time, we believe the most appropriate course is to step back and allow the legislative process to proceed to establish a clear, effective, and much needed regulatory framework.”

The change follows months of objections to provisions governing decentralized finance (DeFi) and noncustodial software developers. Law enforcement groups argued that Section 604 could create investigative gaps, while industry representatives maintained that the provision protects developers who do not control customer assets or transactions.

The group had intensified its warnings in a July 31 letter to Senate leaders. Representing 3,081 sheriffs and approximately 10,000 public safety professionals, the group argued that proposed exemptions could weaken registration, know-your-customer, anti-money laundering, and sanctions requirements for certain DeFi participants.

DeFi and Developer Rules Drove the Dispute

Decentralized finance refers to blockchain-based financial applications that use smart contracts to provide services such as trading, lending, borrowing, and payments. The technology often lets users interact through self-custody wallets without a conventional financial intermediary, creating questions about which developers and service providers should face financial compliance requirements.

Law enforcement organizations have taken differing positions as lawmakers revised the legislation. The 382,000-member Fraternal Order of Police endorsed the revised CLARITY Act after concluding that changes preserved criminal investigations and existing statutes. Major County Sheriffs of America had also moved from opposition to neutral.

The NSA’s change removes one organized law enforcement objection but does not resolve the underlying policy disagreement. Its letter characterized neutrality as a decision to let negotiations proceed while lawmakers continue considering legal, regulatory, and enforcement details. The association did not replace its opposition with support for the bill.

H.R. 3633, formally titled the Digital Asset Market Clarity Act of 2025, would divide oversight of digital assets between the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC). The House passed the measure 294-134 on July 17, 2025 before sending it to the Senate, where lawmakers developed revised market structure legislation.

Sept. 15 Vote Remains the Next Test

Thune filed cloture Aug. 8 on the motion to proceed to H.R. 3633. The procedural step seeks to limit debate on whether the Senate should begin considering the legislation and requires 60 votes if every senator participates. Republicans hold 53 Senate seats, requiring support beyond the party’s membership if all senators vote.

The cloture vote is scheduled for 2:15 p.m. EDT on Sept. 15, which would be the measure’s first Senate floor test. A successful vote would not pass the CLARITY Act; it would limit debate on the motion to proceed, allowing the Senate to move toward formally considering the bill. Debate, amendments, and another cloture vote could follow before final passage.

Supporters characterized the association’s shift as a sign of growing momentum ahead of the vote. U.S. Senator Cynthia Lummis (R-WY) shared on X on Sept. 4:

“Glad to see the National Sheriffs’ Association drop its opposition to the Clarity Act. We’ve built a bipartisan bill that gives law enforcement real tools to fight the illicit finance crimes hurting hardworking Americans. It’s time to get the Clarity Act passed!”

House Majority Whip Tom Emmer (R-MN) also welcomed the association’s shift on X, writing: “Great news. Thank you to our friends at @NationalSheriff for being a valued partner and for working with us throughout this process. The momentum continues to build for the Clarity Act, let’s get it done!”