Nearly 100 Catholic leaders oppose Clarity Act over weakened safeguards against illicit finance and trafficking
Close to 100 Catholic leaders representing congregations across the country are pushing back against a sweeping cryptocurrency market structure bill under discussion, warning that it could weaken safeguards designed to combat human trafficking.
In a letter on Tuesday sent to Senate Majority Leader John Thune and Senate Democratic Leader Chuck Schumer, the Alliance to End Human Trafficking, which is supported by Catholic organizations, said a specific section in the so-called Clarity Act would make it harder to oversee illicit activity linked to trafficking and other crimes.
"The Catholic Church has long taught that economic systems and markets must ultimately serve the human person, especially the poor, vulnerable, and those at greatest risk of exploitation," they said in the letter obtained by The Block. "While we recognize the significant promise of emerging financial technologies and support responsible innovation that expands opportunity and strengthens American leadership, innovation cannot come at the expense of human dignity or public accountability."
Punchbowl News earlier news of the letter.
At issue is Section 604, aka the Blockchain Regulatory Certainty Act (BRCA), a standalone bill that has been incorporated into the Clarity Act and has emerged as a key point of contention as lawmakers try to pass broader crypto legislation. The provision creates a safe harbor for non-custodial developers, clarifying that they are not money transmitters.
According to the letter, the group believes this BRCA provision could hinder law enforcement efforts to investigate and prosecute crypto-related crime.
The Catholic leaders said the section "could create broad carveouts and regulatory ambiguities that may make it more difficult to responsibly monitor illicit financial activity tied to trafficking, organized crime, child exploitation, sanctions evasion, and other forms of abuse."
At the same time, many in the crypto industry strongly support the measure, saying it provides much-needed legal certainty for software developers and helps prevent innovation from moving offshore.
Leaders, including those at the Sisters of Saint Joseph of Philadelphia, Sisters of the Blessed Virgin Mary, and the Congregation of Sisters of St. Agnes signed the letter.
The Digital Chamber CEO Cody Carbone pushed back against the letter on Tuesday.
"Let's be very clear about what Section 604 does," Carbone said in a post on X in response to the letter. "Section 604 says NON-CUSTODIAL developers are not money transmitters. Those who are building tools are different than those running banks."
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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