Clarity Act rewrite drops developers' shield against the money transmission statute

Alex Thorn, head of firmwide research at Galaxy, wrote on X that "all refs to 18 USC 1960 are GONE" from the new text ^[5]. Section 1960 is the unlicensed money transmission statute ^[4]. Somensatto, who called the removal "deeply disappointing," noted that the developers of Tornado Cash and Samourai Wallet were charged under it ^[6].

The Blockchain Regulatory Certainty Act survives inside the bill. Somensatto wrote that folding it in would codify the control-based test FinCEN laid out in its 2019 guidance and guard against future regulatory overreach ^[7]. The criminal question now sits with a court. Michael Lewellen, a research fellow at Coin Center, is suing the Justice Department for a declarative ruling that writing and maintaining non-custodial software is not a crime ^[8]. Somensatto says that case matters more after the rewrite ^[8]. Eleanor Terrett reported that "disappointing" was the common refrain among the industry figures she spoke to who would not go on the record ^[9].

The objection carrying the most signatures is about something else. Letitia James's coalition targets the bill's "qualified transaction" definition, which the letter says would let the SEC override state registration authority ^[14]. The FBI counted $11.4bn stolen through crypto last year, up 22 percent, at an average reported loss of $62,604 ^[15]. That implies roughly 182,000 reported losses in a single year ^[21]. James counts more than 330 state anti-fraud actions since 2017 ^[16], about 41 a year ^[22], or one action for every 550 losses reported in last year alone ^[24].

State registration is not clearing that queue, and the letter does not claim it is. The claim is that the SEC would displace the authority under which those 330 actions were brought ^[14][16].

Cryptopolitan's account does not report a whip count ^[25]. The only named forecast in it comes from the attorney Gabriel Shapiro, who wrote that the odds of Tuesday's cloture vote passing were "looking good" ^[10]. He called the circuit breaker on stablecoin rewards, used in place of an outright ban, a "smart compromise" ^[10]. Treasury Secretary Scott Bessent posted that the Clarity Act is "essential" to the United States winning the global technology race, tying it to the earlier passage of the GENIUS Act ^[11]. Christopher Williston, who leads the Independent Bankers Association of Texas, called Monday's revised yield language "a joke" and "a meaningless nothing" ^[12].

If cloture clears, developer exposure under 1960 gets resolved, if at all, in Lewellen's case ^[8]. If it fails, the 1960 reference is the cheapest thing to put back, because restoring it costs the drafters nothing with the state prosecutors, whose complaint is preemption ^[14]. A third path narrows preemption and leaves the criminal shield out, which answers the 18 attorneys general and none of the developers. I would not price Tuesday as settled. The rewrite has drawn named opposition from two Republican attorneys general, Kris Kobach of Kansas and Andy Wilson of Ohio, who signed alongside James and California's Rob Bonta ^[17], from Williston's Texas bankers ^[12], and from the Indian Gaming Association, which warned of the largest expansion of CFTC authority since the Dodd-Frank law of 2010 ^[19]. Its chair, David Z. Bean, said the changes "do not address the concerns of Indian Country" ^[18]. A comfortable margin on Tuesday would show that reading was wrong, and that dropping the statute reference bought votes nobody had counted.