Clarity Act Is Meant to Crack Down on Sanctions Evasion

TRM Labs says the Clarity Act would put exchanges and stablecoin issuers under tougher BSA and sanctions rules, while also creating more room for real-time coordination with US authorities.

Key Takeaways

• According to TRM Labs researcher Ari Redbord, the US Clarity Act actually helps crack down on sanctions evasion and money laundering in crypto.
• The law brings digital asset service providers under the Bank Secrecy Act and requires checks, reporting, audits, and real-time coordination with law enforcement.
• The Clarity Act also gives new powers to hold suspicious funds and target jurisdictions and parties that help facilitate illegal money flows.

The US Digital Asset Market Clarity Act is not, in Ari Redbord’s view, a green light for sanctions evasion. Redbord, a researcher at TRM Labs, argues the bill could do the opposite and make it harder to move illicit funds through crypto at scale. The discussion picked up after Senator Elizabeth Warren called the draft bill on X a possible “ticket to sanctions evasion,” but Redbord says the proposal is really built around tools that already work in the real world.

More Oversight for Crypto

Redbord says the bill’s main shift is that digital asset service providers would, for the first time, come fully under the Bank Secrecy Act. In practice, that would require risk assessments, internal controls, a compliance officer, staff training, audits, and mandatory reports for suspicious activity.

The proposal also tries to make real-time information sharing between exchanges and law enforcement part of the standard playbook. Under that setup, a model like Beacon Network, which is built around fast interception, seizure, and disruption, would no longer depend only on voluntary cooperation and would instead have a legal basis.

It also calls for an independent working group to build AI tools that can spot terror financing and money laundering in digital markets. For kiosk operators, the bill adds wallet pinning, hold periods, and daily limits for new users, plus blockchain intelligence meant to catch scammers before funds leave the platform.

Sanctions and Enforcement

Redbord also says the Treasury Department would get clear authority to go after jurisdictions that are major sources of money laundering. In his view, that would move enforcement away from isolated transactions and toward the broader source of the money flow, which could make it easier to disrupt illegal networks.

The Clarity Act also includes a hold law for digital assets, giving service providers and stablecoin issuers the ability to hold, and when necessary freeze, funds linked to suspected illegal activity. Existing reporting rules and sanctions powers would still stay in place.

The text also makes clear that non-custodial developers who never touch customer funds are protected. At the same time, someone who knowingly helps move criminal proceeds could still face criminal charges, even if that person never actually holds the assets.

Why This Matters

For European crypto readers, the debate is a reminder of how quickly crypto regulation, sanctions, and anti-money-laundering rules are converging in the US. The Clarity Act is not only about drawing cleaner lines between regulators. It is also about pulling existing market participants into a tighter oversight framework. That could matter for international exchanges and crypto companies that deal with US customers, compliance obligations, or enforcement risk. In that broader debate, the law’s treatment of protection for non-custodial developers also matters, and it has been part of Senate discussions for some time.