Senator Cynthia Lummis has pushed back against Sen. Elizabeth Warren’s criticism of the Digital Asset Market CLARITY Act, arguing that the legislation strengthens rather than weakens U.S. sanctions enforcement against illicit crypto activity.
In a post on X, Lummis disputed Warren’s claim that the bill would create opportunities for sanctions evasion, pointing to provisions she said expand the Treasury Department’s authority to combat the misuse of digital assets.
The sanctions debate heats up
Responding directly to Warren, Lummis said Sections 303 and 305 of the CLARITY Act are designed to strengthen enforcement tools targeting illicit cryptocurrency activity. According to Lummis, Section 303 authorizes additional crypto-related sanctions targeting Iran, while Section 305 gives cryptocurrency exchanges greater authority to block illicit funds before they reach North Korea or other sanctioned entities.
“We both want bad actors held accountable. The difference is I’m working on solutions, you’re shouting into the void hoping the status quo fixes itself,” Lummis wrote on X.
Why Warren disagrees
Lummis’ comments came after Warren criticized the legislation, describing it as “a ticket to sanctions evasion.”
The senator has argued that aspects of the CLARITY Act could create regulatory gaps that make it easier for sanctioned entities and criminal organizations to move funds through digital assets. Her concerns have been echoed by a former National Security Council official, who warned that the legislation could undermine existing sanctions enforcement.
The disagreement reflects broader debate in Congress over how digital asset legislation should balance innovation with national security and anti-money laundering protections.
Wyden backs another key CLARITY Act provision
Lummis’ comments come just days after Senator Ron Wyden urged Senate leaders to preserve Section 604 of the bill, known as the Blockchain Regulatory Certainty Act (BRCA), which would prevent developers of non-custodial blockchain software from being treated as financial institutions under the Bank Secrecy Act.
In a letter to Senate Majority Leader John Thune and Senate Democratic Leader Chuck Schumer, Wyden argued that developers who do not control customer funds should not face money transmitter obligations simply for publishing software. He said the provision reflects existing FinCEN guidance, aligns with emerging case law, and would provide legal certainty for open-source blockchain development.
Wyden also warned that failing to preserve the provision could push blockchain innovation outside the United States, highlighting the broader policy debate taking place alongside renewed scrutiny of ethics rules for elected officials involved in digital assets.
Congress is still divided over the bill
The exchange adds to ongoing discussions surrounding the CLARITY Act, one of the principal crypto market structure bills under consideration in Congress. Supporters of the legislation argue it provides regulatory certainty while preserving safeguards against illicit finance. Critics, including Warren, contend that some provisions could reduce oversight and create enforcement challenges.
As lawmakers continue reviewing the bill, sanctions enforcement, anti-money laundering measures, and regulatory authority remain among the key issues shaping the debate over the future of U.S. digital asset policy.
Also Read: CFTC Chief Selig Urges Congress to Pass CLARITY Act Quickly
