For decades, the United States’s adversaries have exploited gaps in our financial system to fund terrorism, evade sanctions, and wage economic warfare against our interests. We have always adapted, tightening the rules, closing loopholes, and staying one step ahead. But in recent years, a new and largely unregulated financial ecosystem has emerged, and our enemies have taken full advantage of our failure to act.
Digital assets now move hundreds of billions of dollars across borders daily, often with minimal oversight, minimal accountability, and minimal cooperation with the law enforcement and intelligence agencies charged with keeping Americans safe. That is not a policy nuance. It is a national security emergency.
Sens. Tim Scott (R-SC), Cynthia Lummis (R-WY), and Bernie Moreno (R-OH) understand this better than almost anyone in Washington. The Clarity Act takes direct aim at this vulnerability, and it does so in a way that is smart, targeted, and long overdue.
CRYPTO CLARITY: TIME FOR WASHINGTON TO TAKE THE FUTURE OF MONEY SERIOUSLY
Consider what the bill actually does: Section 303 grants the Treasury new authority to sever foreign crypto companies and jurisdictions from the U.S. financial system when they pose illicit finance risks. This is the digital equivalent of cutting off a foreign bank.
It is a tool our adversaries fear and one we have needed for years. Section 507 directs U.S. agencies to engage foreign partners and push them to adopt AML and sanctions standards consistent with our own. Rogue jurisdictions will no longer serve as convenient on-ramps for sanctioned entities to launder value into the global economy.
The bill also addresses a glaring operational gap that has hampered law enforcement in real time. Section 305 protects crypto companies from civil liability when they voluntarily hold suspicious transactions or comply with law enforcement requests while a court order is obtained. This matters enormously.
Hamas and its affiliates have raised tens of millions of dollars through cryptocurrency, exploiting the speed of digital transactions and the hesitation of private companies to act without legal cover. This provision fixes that and converts the private sector from a bystander into a partner in national security.
AMERICA’S GLOBAL FINANCIAL LEADERSHIP HINGES ON CLARITY ACT
Sections 201 and 301 bring crypto exchanges, including those hiding behind the decentralization label, squarely within Bank Secrecy Act requirements. The AML evasion that currently thrives in this space depends on regulatory ambiguity. The Clarity Act eliminates it.
Scott, Lummis, and Moreno have done what too few in Congress are willing to do: studied this technology, understood its risks, and wrote serious legislation to address them. The Clarity Act is not a niche financial regulation bill. It is a national security measure. Congress should treat it accordingly.
Garrett Exner is an adjunct fellow at the Hudson Institute and on the board of Veterans on Duty. Previously, he was a staffer for US Senator Ted Cruz (R-TX), a counterterrorism policy advisor in the Office of the Secretary of Defense, and he served 14 years as a special operations officer in the Marine Corps.