CLARITY Act fails to protect consumers from fraud, conflicts of interest, and financial instability, say public-interest groups
Media Contact: Lisa McDonald, Vice President of Communications, 202-207-2829
Washington, DC – The National Consumers League (NCL) today along with a coalition of public-interest organizations, today sent a letter to Senate Majority Leader John Thune and Senate Minority Leader Chuck Schumer urging them to oppose the Senate version of the Digital Asset Market Clarity Act (CLARITY Act) as it fails to provide adequate consumer protections, combat financial crime, or address serious ethics concerns.
“Consumers have already lost billions of dollars to cryptocurrency scams, hacks, fraud schemes, and market failures,” said John Breyault, Vice President of Public Policy, National Consumers League. “Congress should not reward the crypto industry’s lobbying campaign by passing legislation that leaves consumers exposed while giving the industry the legitimacy it has spent years trying to buy. Any crypto market structure bill must put consumer protection first—not treat it as an afterthought.”
The legislation, recently approved by the Senate Banking Committee, is being promoted as a framework to bring clarity to cryptocurrency markets. However, consumer advocates warn that the bill leaves dangerous gaps that could expose consumers to fraud, facilitate illicit finance, and permit public officials, including the Trump family, to profit from the very industry they are charged with regulating.
The coalition’s letter identifies three major concerns with the legislation:
- Weak anti-money laundering and Bank Secrecy Act requirements that fail to hold key cryptocurrency intermediaries accountable;
- A failure to address conflicts of interest involving public officials and their families who stand to profit from cryptocurrency ventures while influencing federal policy;
- Loopholes that could allow stablecoin issuers and crypto platforms to offer yield-like rewards that siphon deposits from community banks and reduce local lending.
The Senate bill arrives amid increasing scrutiny of the cryptocurrency industry’s influence in Washington and growing concerns about whether current proposals adequately protect consumers and the broader financial system. Recent negotiations over anti-money laundering requirements, ethics provisions, and stablecoin rewards underscore the unresolved issues that remain before the legislation reaches the Senate floor.
“Americans deserve financial innovation that is safe, transparent, and accountable,” Breyault added. “Instead, the CLARITY Act asks consumers to trust an industry that continues to generate enormous losses from scams and fraud while failing to close critical loopholes involving illicit finance and political corruption. Congress should not give this industry a congressional seal of approval until those problems are addressed.”
The coalition includes the National Consumers League, American Economic Liberties Project, Americans for Financial Reform, Consumer Action, Consumer Federation of America, Consumer Federation of California, Demand Progress Action, Indivisble, National Community Reinvestment Coalition (NCRC), the National Consumer Law Center (on behalf of its low-income clients), and Public Citizen.
The full letter is available here.
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About the National Consumers League (NCL)
The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.
