Clarity Act Faces Calls to Close Crypto Corruption and Sanctions Gaps

The Digital Asset Market Clarity Act, which cleared the Senate Banking Committee on May 14, is moving toward a Senate floor vote as one of the most significant U.S. crypto regulation efforts to date. In a CoinDesk opinion article, Scott Greytak argued that the bill still leaves five major corruption and illicit-finance gaps that Congress should address before passage.

The debate matters because the legislation is intended to define how digital asset markets are governed in the United States. According to the article, gaps in the current version could weaken anti-money laundering controls, sanctions enforcement and public trust in the regulatory framework, especially as crypto platforms, stablecoins and decentralized finance tools continue to handle cross-border value transfers.

One concern centers on DeFi platforms and intermediaries that perform financial functions while claiming to be decentralized. The article points to the use of mixers and virtual asset laundering infrastructure by North Korean actors, including Treasury findings related to Tornado Cash and funds stolen by the Lazarus Group, as examples of why Congress may need clearer oversight standards.

Greytak also warned that rules should not disappear when software, rather than a person, carries out the same activity. He cited a FinCEN warning about Iran's Islamic Revolutionary Guard Corps using a shadow banking network involving digital asset infrastructure, and argued that the Treasury Department's Office of Foreign Assets Control should have explicit authority to act against anonymizing tools used for sanctions evasion.

The article further identifies stablecoins and offshore registration as areas needing stronger controls. It argues that stablecoin issuers should monitor broader ecosystem activity for suspicious use, and that platforms serving U.S. customers or routing activity through the U.S. financial system should not avoid obligations simply by registering abroad.

The final concern is ethics. The article says the bill is advancing while President Trump's family has reported financial ties to digital asset ventures that could be affected by the legislation, and argues that public officials and immediate family members should be barred from owning, promoting or soliciting investment in digital asset businesses while in office. Greytak's core argument is that Congress must decide whether the Clarity Act will create enforceable guardrails or leave openings for illicit finance and conflicts of interest.