White House meets law enforcement on crypto bill dispute

The White House is convening a meeting with law enforcement groups on Monday in an effort to resolve a key dispute threatening the passage of major cryptocurrency legislation in the Senate. The targeted session aims to address objections to the Digital Asset Market Clarity Act, which faces a narrowing window for a vote before the August recess.

The central controversy involves Section 604 of the bill, a provision drawn from the earlier Blockchain Regulatory Certainty Act. This section would shield software developers from being classified as money transmitters under the Bank Secrecy Act if they do not exercise ultimate control over their tools. The crypto industry views this protection as foundational for the continued development of decentralized finance in the United States.

Law enforcement groups, led by the National Sheriffs Association, argue the exemption is too broad. In a May letter to Senate Banking Committee leaders, the association stated that while some developers may not be engaged in money transmitting, others are, and a blanket exemption could hinder investigations into sanctions evasion and crimes facilitated by mixing tools. The group was invited to a prior...