The National Sheriffs’ Association has dropped its opposition to the CLARITY Act and told Senate leaders it now takes a neutral position, removing one of the few organized law-enforcement objections to the crypto market structure bill days before a scheduled September 15 cloture vote.
In a letter to Senate leadership, the association said it would “step back” and let lawmakers establish a regulatory framework for digital assets. The group credited work by Congress, the Trump administration and other stakeholders with addressing its legal and enforcement concerns. The letter was first reported by Cointelegraph and circulated among Senate staff on Tuesday.
What changed for the sheriffs
The association had warned since July that provisions exempting some crypto mixers from registration requirements could make it harder to trace transactions and recover stolen funds. One sheriff said at the time that the legislation protected “the crypto industry, not the public.” Mixer protocols pool and obscure the path of crypto payments, and ransomware crews have used them for years to launder payments extracted from hospitals, schools and local governments, the very agencies sheriffs run.
The pivot matters for a bill that has struggled to find votes. Senate leadership has scheduled a cloture vote for September 15, and Republican senators have warned the bill could fail over ethics language. Treasury Secretary Scott Bessent pressed senators this week, arguing that a failed vote would send a troubling signal about US digital asset leadership. Senator Cynthia Lummis has made the same case in blunt terms, saying that failure would end American leadership in cryptocurrency.
A tight margin in the Senate
The CLARITY Act passed the House in July with bipartisan support, but the Senate version has drawn objections from both parties. Some Democrats argue the bill exempts too many tokens from securities law and would leave retail investors with less protection than they have in stock markets. A bloc of Republicans has pushed for language barring members of Congress and senior executive branch officials from issuing or trading digital assets while in office, a response to criticism over the president family’s own crypto ventures.
Lobbying has intensified on both sides. The Crypto Council for Innovation and the Blockchain Association have run ads in states with undecided senators. Consumer groups, including Better Markets, have countered that the bill strips the SEC of authority over a wide range of tokens. Crypto philanthropy and campaign donations have also become an election-year flashpoint, with both parties courting industry donors while questioning each other’s ties to it.
| Group | Position | Main concern |
|---|---|---|
| National Sheriffs’ Association | Neutral, was opposed | Mixer exemptions, fund tracing |
| Blockchain Association | Supports | Wants SEC and CFTC split finalized |
| Better Markets | Opposed | SEC authority over tokens |
| CFTC | Engaged | Rulemaking scope if passed |
Regulators move either way
Even if the vote fails, the SEC and CFTC have signaled they could advance parts of crypto regulation on their own. The CFTC’s Innovation Advisory Committee has met to discuss how exchanges, DeFi protocols and derivatives platforms might operate under federal rules, covering leverage, tokenization and prediction markets. SEC staff have told issuers that listing standards for certain spot crypto funds can move forward under existing frameworks.
The regulatory split itself is the point of the bill. Under current law, the two agencies have overlapping claims over digital assets, and courts have produced conflicting rulings on whether many tokens are securities. The CLARITY Act would draw a line: commodities like bitcoin and ether would fall to the CFTC, while tokens sold as investment contracts would stay with the SEC, with interim registration for projects in transition.
The sheriffs’ letter does not guarantee votes. Neutral is not support, and the group said it still expects enforcement protections to appear in any final text. But it removes a talking point that opponents used in town halls and hearings over the summer, and it hands the bill’s managers a modest piece of momentum heading into Monday.
“We will step back and allow Congress, the administration and other stakeholders to establish a regulatory framework for digital assets,” the association wrote in its letter to Senate leaders.
If cloture passes on September 15, the Senate would move to limited debate and amendment votes. Senate aides say the ethics language remains the hardest open issue, and that a final vote is unlikely before the end of the month. A failed cloture vote would likely push the bill into next year, with the midterm campaign season making any complicated legislative compromise harder to assemble.