Sheriffs Hold Out as Trump Weighs Ethics Deal on CLARITY Act

The National Sheriffs’ Association told Senate leaders John Thune and Chuck Schumer that the CLARITY Act carries “significant law enforcement and public safety risks,” focusing on the Blockchain Regulatory Certainty Act provision that shields non-custodial DeFi developers. The letter arrived as President Donald Trump’s White House reviews a bipartisan ethics counteroffer from Senators Thom Tillis and Ruben Gallego that could unlock a Senate floor vote before the August recess.

Polymarket put the chance Trump signs the bill this year at 31 percent, up from a recent low near 23 percent once the ethics package reached the White House.

Sheriffs Keep the Pressure On

In its letter the NSA argued the BRCA language protects DeFi platforms that can obscure transactions and would make it harder to stop financial crimes before they happen or prosecute them afterward. The group represents more than 3,000 sheriffs and thousands of deputies who encounter crypto-linked drug trafficking, fraud and exploitation cases on the ground.

Earlier this year the same association had already flagged Section 604 exemptions for non-controlling developers as a potential gap in AML and BSA tools. The new letter reopens that fight just as other large law-enforcement organizations moved the other way.

Crowd chatter on X noted the timing looked late, coming after the Fraternal Order of Police and major city chiefs had already flipped. Some posts also pointed to the association’s partnerships with traditional finance groups as context for the hard line.

Ethics Deal Puts State AGs in Play

According to reporting from Crypto In America, the Tillis-Gallego package reached the White House on Thursday. It would let state attorneys general sue the Department of Justice if the DOJ fails to enforce ethics rules barring senior federal officials from issuing or sponsoring crypto tokens.

Democrats had rejected an earlier White House-backed version that left enforcement solely with the DOJ. The new mechanism draws a parallel to the Laken Riley Act, which already lets state AGs sue over certain immigration enforcement failures.

• State AGs gain standing to force DOJ action on crypto conflict-of-interest rules.
• The change aims to satisfy key Democrats needed for 60 votes.
• White House concerns about overreach by state AGs remain unresolved in public reporting.
• Industry lobbyists spent the week pressing allies for a quick green light so cloture can be filed before senators leave town.

A Democratic strategist told Crypto In America that ethics, the BRCA language and remaining agriculture-title issues all have to lock together or the bill dies. The state AG power is the hidden lever that could bring those votes into range.

Law Enforcement Split After the Revisions

Not every badge is lined up against the bill. After lawmakers added a new law-enforcement title and clarified intent language, several major groups reversed course.

The Fraternal Order of Police endorsement letter from President Patrick Yoes said the clarifying language “does not limit the ability of law enforcement and prosecutors to address unlawful conduct.” It highlighted temporary transaction holds, kiosk fraud measures, seizure updates and Title IX grants for state and local digital-asset training.

The Major Cities Chiefs Association support letter from Milwaukee Chief Jeffrey Norman pointed to the new LE title plus additions of state and local agencies to several sections as the decisive changes. Those police chiefs backing the latest draft joined the FOP after the revisions landed.

Earlier the Major County Sheriffs neutral shift had already removed one high-profile roadblock representing more than 120 million residents.

What the BRCA Codifies

Treasury Secretary Scott Bessent rejected the “boogeyman” framing in a lengthy post that closed with a Satoshi Nakamoto line. He wrote that the provision “does nothing other than codify longstanding Treasury Department policy that’s remained consistent across Administrations: non-custodial builders and developers are not, and have never been, subject to registration obligations under the Bank Secrecy Act.”

The Blockchain Regulatory Certainty Act, which Washington lobbyists have spun up as a boogeyman for certain groups of prosecutors and law enforcement, does nothing other than codify longstanding Treasury Department policy that’s remained consistent across Administrations: non-custodial builders and developers are not, and have never been, subject to registration obligations under the Bank Secrecy Act.

That passage sits inside Bessent’s full statement on X, which drew more than 2.3 million views. He also noted that Titles II and III raise intermediary compliance closer to traditional finance standards and that the FOP had already endorsed the bill.

Bessent urged an immediate Senate vote, arguing Democrats fear Senator Elizabeth Warren’s anti-crypto flank more than they want U.S. leadership. The House had already passed the measure more than a year earlier.

Banks and the Yield Side Still Hover

Even if ethics and BRCA clear, community-bank concerns over stablecoin rewards remain live. Senators Mike Rounds, James Lankford and Jerry Moran have raised the deposit-flight risk. State banking officials wrote that interest-like rewards could weaken local lending bases by hundreds of billions.

If CLARITY fails, the GENIUS Act’s issuer yield ban stays in place but leaves crypto firms freer to offer customer rewards, a weaker shield for banks than the current draft’s Tillis-Alsobrooks compromise. That side fight sits mostly outside the LE headlines yet still affects the final vote count.

1. May 29, 2025, H.R. 3633 introduced.
2. July 17, 2025, House passes the bill 294-134; text available as the House-passed CLARITY Act text.
3. March-July 2026, successive LE letters, first opposition then FOP and MCCA flips after revisions.
4. July 30-31, 2026, Bessent X post; Tillis-Gallego ethics package to White House; NSA letter to Thune and Schumer.
5. Early August 2026, White House review window; possible cloture before recess.

The Recess Clock and Passage Odds

Senators are scheduled to leave by roughly August 7. A green light on ethics would let Majority Leader Thune file a motion to proceed next week inside the remaining two-week Senate window before recess. Without it the bill likely slips into September or later, when election-year dynamics tighten further.

Prediction-market odds have swung hard: from peaks above 80 percent earlier in the year down through the 20s and back to the low 30s once the ethics package landed. JPMorgan has already warned that further delay could let traditional finance capture tokenization gains at public crypto networks’ expense.

The hidden stakeholders remain the ones with the most operational skin. State AGs would gain a new enforcement club if Trump accepts the deal. Local sheriffs keep pressing for BRCA changes even after national police organizations signed on. Those two pressures, more than the headline ethics drama alone, will decide whether the floor vote materializes before the recess lights go out.