Ari Redbord, global head of policy at TRM Labs, asserts that the bill, in its current form, can effectively prevent sanctions evasion on a large scale.
By Ari Redbord|Edited by Cheyenne Ligon Jul 14, 2026, 5:27 p.m. 4 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailMake preferred onRecently, Senator Elizabeth Warren expressed her concerns via X, claiming that the Digital Asset Market Clarity Act, as it stands, serves as a "ticket to sanctions evasion." She joins a select group of critics worried about the potential implications of this legislation on national security. Given the backgrounds of some of these critics in sanctions and security, their concerns warrant serious consideration.
To clarify, the Clarity Act is not, as Senator Warren suggests, a means to evade sanctions. Instead, it is designed to prevent sanctions evasion effectively and at scale by building upon existing successful enforcement tools.
Ari Redbord is the Global Head of Policy at TRM Labs. Before joining TRM, Ari served as Senior Advisor to the Deputy Secretary and Undersecretary for Terrorism and Financial Intelligence at the U.S. Treasury.
Interestingly, some critics have referenced a recent article from the Wall Street Journal about the Hong Kong exchange CoinEx to illustrate the risks involved. However, CoinEx exemplifies how a public ledger can be utilized to monitor and disrupt state-sponsored activities.
Investigators tracked around $3.84 billion in transactions associated with Iran, linking wallets held by Iran's central bank to sanctioned military networks and funds misappropriated by North Korean hackers. Such transparency is only possible due to the use of a public blockchain, which critics mistakenly view as a liability.
Key Features of the Clarity Act
The Clarity Act comprises nearly twenty specific provisions focused on anti-money laundering, sanctions, and law enforcement authority.
If passed in its current form, the bill would fully incorporate digital asset service providers under the Bank Secrecy Act for the first time, mandating risk assessments, internal controls, compliance officers, training, audits, and suspicious activity reporting.
The legislation establishes real-time information sharing between exchanges and law enforcement as a recognized practice, replacing voluntary coordination with legal requirements, similar to the Beacon Network's model for real-time interdiction and disruption.
A dedicated working group would be responsible for developing AI-driven tools to detect and thwart terrorist financing and money laundering within digital asset markets. Kiosk operators would implement measures such as wallet pinning, hold periods, and daily transaction limits for new users, along with blockchain intelligence requirements to catch fraudsters before funds are withdrawn.
The Treasury Department would gain explicit authority to act against jurisdictions identified as primary money laundering concerns, effectively addressing illicit flows at the source rather than pursuing them transaction by transaction.
A digital assets hold law would empower digital asset service providers and stablecoin issuers to hold and freeze funds linked to suspected illicit activities, with the ability to extend these holds beyond the initial period, while maintaining existing reporting obligations and sanctions authority.
Developers who do not handle user funds would receive a clear legal shield under the Blockchain Regulatory Certainty Act, a provision of the Clarity Act, while law enforcement retains the ability to charge money laundering conspiracy against anyone who knowingly facilitates the transfer of criminal proceeds, regardless of custodial status.
A primary objective of the Clarity Act is to provide U.S.-based crypto firms with the necessary guidelines to operate safely and legally, keeping innovators within the United States. By doing so, it ensures they remain subject to the Bank Secrecy Act, U.S. courts, and law enforcement oversight. Developers creating non-compliant software offshore are much harder to regulate or hold accountable than those operating under this legislation domestically.
While there has been considerable discussion about law enforcement organizations opposing the Clarity Act, three significant groups—the National Organization of Black Law Enforcement Executives, the Major County Sheriffs of America, and the Federal Law Enforcement Officers Association—have publicly supported the bill, highlighting its provisions related to the Bank Secrecy Act, sanctions authority, and transaction hold authority as crucial for investigators.
It is true that illicit actors are utilizing crypto, blockchain, and AI technologies. Historically, bad actors have been early adopters of transformative technologies, from the telegraph to the internet and encrypted messaging. The appropriate response to the misuse of technology is not to ban or suppress it, but rather to harness it effectively. This includes providing legal clarity to those developing and utilizing the technology.
We must stay ahead of illicit actors by leveraging the same innovations they exploit for nefarious purposes, whether through real-time information sharing between exchanges and law enforcement or a digital assets hold law that enables issuers to act on illicit funds swiftly. The Clarity Act is not a means for sanctions evasion; it offers legal clarity for builders and equips law enforcement with the necessary tools to combat misuse of transformative technology.
Note: The views presented in this column belong to the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.
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Gate Leads Spot Market Share Gains as CEX Volumes Rise for First Time in Five Months
Gate Leads Spot Market Share Gains as CEX Volumes Rise for First Time in Five Months
CEX trading volumes rose for the first time in five months in June, with spot climbing 15.3% to $1.11T and RWA perpetual volumes surging to a record $311B.
By CoinDesk ResearchJul 13, 2026CEX trading volumes rose for the first time in five months in June, with spot climbing 15.3% to $1.11T and RWA perpetual volumes surging to a record $311B.
Why it matters:
CEX trading volumes rose for the first time in five months in June, with spot climbing 15.3% to $1.11T and RWA perpetual volumes surging to a record $311B.
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