In the United States, clashes between Republicans and Democrats are growing again over the Senate crypto market structure bill known as the CLARITY Act.

Cryptopolitan, a blockchain outlet, reported on Wednesday that Wyoming Senator Cynthia Lummis (신시아 루미스) pushed back against criticism from Senator Elizabeth Warren (엘리자베스 워런) that the bill would create anti-money laundering (AML) loopholes. Lummis said the bill contains more than 16 safeguards to block illicit fund flows.

The issue is whether the bill strengthens the response to illicit finance as it overhauls digital asset regulation, or instead weakens it. The CLARITY Act separates the jurisdictions of the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). It also introduces new compliance standards for crypto companies. Supporters of the bill believe Senate deliberations must advance before Congress’ long August recess for legislation to be completed this year.

Warren claimed on social media that hostile foreign forces are moving billions of dollars through crypto networks. She said Iran-linked groups have already moved about $3.84 billion through CoinEx. She said that, as currently drafted, the CLARITY Act could worsen the problem.

Lummis countered by saying the CLARITY Act provides safeguards, not loopholes. She cited Sections 201, 303 and 305, saying the SEC can freeze illicit assets and that the bill includes sanctions-related provisions and new AML rules.

Concerns about illicit fundraising are not limited to Warren. Last month, law enforcement groups and a Catholic coalition each sent letters warning that a broad exemption provision in Section 604 could weaken safeguards designed to prevent criminal fund flows. Opposition over other provisions of the bill is also continuing.

Banks worry the bill could give stablecoin issuers an unfair competitive advantage. The American Bankers Association (ABA) said banks could lose deposit income if consumers move to regulated stablecoins.

Critics also say there are loopholes in conflict-of-interest rules. Warren said any crypto bill headed to the Senate floor should include provisions to prevent the president, vice president, senior executive branch officials, members of Congress and their families from profiting from the crypto industry. She said, "Without such safeguards, it would only encourage U.S. President Donald Trump’s crypto corruption."

The controversy also intersects with renewed attention on the Trump family’s crypto income. Financial disclosures show World Liberty Financial (WLI) earned more than $500 million from governance token sales, and CIC Digital made more than $600 million from a Trump-branded memecoin. The memecoin was launched just days before Trump returned to office.

Markets are viewing the chances of the bill passing this year as low. On Polymarket, the probability of the CLARITY Act passing fell to 40 percent. It climbed as high as 64 percent at one point in June, but fell amid a tight legislative schedule and renewed scrutiny of Trump’s $1.4 billion crypto income. The bill needs at least 60 votes to make progress in the Senate.

The congressional calendar is also a factor. Senators return from a recess on July 13, but another recess is scheduled soon after in August, leaving limited time for actual deliberations. Galaxy Research lowered its outlook for the CLARITY Act’s legislative prospects to 50 percent from 60 percent in June, and Kalshi data put the probability of a crypto market structure bill passing this year at 36 to 44 percent. Against this backdrop, Senate negotiations are expected to hinge on clashes over illicit finance regulation and conflict-of-interest provisions.

More evidence that our adversaries exploit crypto to move billions. The Clarity Act, as it's currently written, would make this problem worse. Congress should be strengthening illicit finance standards, not creating new loopholes. pic.twitter.com/61lqFgRntH