80 Catholic leaders and activists fighting human trafficking have criticized Section 604 of the CLARITY Act. They argue that it will complicate the oversight of illegal financial flows and create vulnerabilities that transnational criminal groups could exploit.

A coalition of Catholic organizations and leaders warned Senate leadership today that crypto market structure legislation "could weaken safeguards against illicit finance and create vulnerabilities that traffickers and transnational criminal organizations may exploit." pic.twitter.com/RJ2WGcyYZN

— Brendan Pedersen (@BrendanPedersen) June 23, 2026

The initiative was led by the Alliance to End Human Trafficking (AEHT), supported by Catholic organizations. The letter was sent to Senate Republican Majority Leader John Thune and Democratic Leader Chuck Schumer.

The criticism targets Section 604, also known as the Blockchain Regulatory Certainty Act (BRCA). This section aims to clarify that non-custodial developers are not considered money transmitters if they do not control users' funds.

The authors of the letter believe that such wording could create overly broad exceptions and regulatory uncertainty. They estimate that this would hinder the monitoring of financial activities related to human trafficking, organized crime, child exploitation, sanctions evasion, and other abuses.

"The test of any financial system is not only whether it generates wealth or innovation but also whether it protects human life and dignity," the statement reads.

AEHT Executive Director Kathy Bowler Gozevich believes that human traffickers quickly adapt to new technologies if oversight does not keep pace. She stated that the organization supports responsible fintech development but insists that innovation should not weaken protections for vulnerable individuals.

In the crypto industry, Section 604 is seen as an important assurance for developers. Cody Carbone, head of The Digital Chamber, stated that the provision merely clarifies the status of non-custodial developers: according to him, tool creators differ from organizations that manage client funds, as reported by The Block.

Coin Center Executive Director Peter Van Valkenburgh stated that the organization will not support the CLARITY Act without a full version of the BRCA.

Let me make one more thing crystal clear. We do not support Clarity with the stripped version of BRCA proposed by Sen. Cortez Masto. For other members of the committee, this is a with us or against us moment. Stand up for developer rights or vote no. https://t.co/6VzrUpLCGU

— Peter Van Valkenburgh (@valkenburgh) May 13, 2026

According to The Block, the letter was signed by leaders from various Catholic organizations, including representatives from the Sisters of Saint Joseph of Philadelphia, the Sisters of the Blessed Virgin Mary, and the Congregation of the Sisters of Saint Agnes.

On May 14, the U.S. Senate Banking Committee approved the cryptocurrency bill by a vote of 15 to 9. The CLARITY Act includes:

  • expanding the Bank Secrecy Act and sanctions compliance requirements to brokers, dealers, and digital asset exchanges;
  • launching a pilot program by the Treasury for data sharing between the Justice Department, FBI, DEA, and the private sector;
  • establishing a permanent interagency group to combat crimes in the virtual asset space;
  • setting strict standards for cryptocurrency ATMs, including reporting, transaction limits, and monitoring.

In June, the Blockchain Association sent an open letter to Thune and Schumer urging them to expedite the passage of the CLARITY Act. Among the 160 signatories were former law enforcement officials, as well as national security and intelligence personnel.

Notably, JPMorgan CEO Jamie Dimon criticized the bill amid a dispute over rewards for "stablecoins." He stated that the document effectively allows issuers to pay interest on deposits without comparable customer protections.