The National Sheriffs' Association reversed its opposition to the Digital Asset Market Clarity Act on Thursday, writing to Senate leadership that it was changing its position to neutral, given how complex the legislation was and the number of important details that remain under consideration.
"We believe the most appropriate course is to step back and allow the legislative process to proceed to establish a clear, effective, and much-needed regulatory framework," wrote NSA President Sheriff Troy Wellman and Executive Director Justin Smith in a letter to Senate Majority Leader John Thune and Minority Leader Chuck Schumer.
The NSA wrote a letter in May addressed to the Senate Banking Committee warning that section 604 of the bill would give mixers, tumblers and DeFi platforms "a blanket exemption" from anti-money laundering rules.
"Some will use evolving software, algorithms, and agentic AI to help transfer digital assets without tracing or accountability, launder money, finance terrorism, and evade sanctions," the May letter said.
A month after that letter, the White House invited law enforcement organizations that had expressed their concerns over the crypto market structure bill to meet and discuss their opposition. The intention behind the meeting was to iron out objections over the way the legislation shields against illegal finance.
The Blockchain Association's CEO Summer Mersinger argued in a CoinDesk op-ed in July that the NSA's opposition was misplaced, calling the bill "the most important consumer protection effort in years."
The NSA's shift to neutral status removes one of the bill's most vocal law-enforcement critics ahead of a September vote.
The Clarity Act has had a difficult path. The Senate pushed the bill into September without an initial final vote after months of negotiation, but there are still a number of outstanding issues to resolve, including a key ethics provision Democrats want before they'll support the bill. The House of Representatives also announced earlier this week that it would hold its final votes before the midterm election right after the Senate returns, all but assuring that the bill cannot become law before the November election.