Major Sheriffs Group Drops CLARITY Act Opposition After Section 604 Talks

Highlights:

• The MCSA has moved to neutral after further talks over the CLARITY Act Section 604.
• Sheriffs want local agencies included in Treasury studies and crypto advisory groups.
• The group still seeks more training, tools, and funding for digital asset cases.

The Major County Sheriffs of America (MSCA) has dropped its opposition to the Digital Asset Market CLARITY Act after further review. In a July 3 letter, the group told Senate Banking Committee leaders Tim Scott and Elizabeth Warren that talks gave it more clarity on Section 604. As a result, MCSA now takes a neutral position, though it still wants amendments.

MCSA Changes Course After Weeks of Review

The group said it kept reviewing the bill after raising objections in a May 14 letter. It also held discussions with the administration and with state and local law enforcement officials. Those talks, the letter said, offered clarity on how Section 604 would likely work in practice. Therefore, MCSA said it no longer opposes H.R. 3633.

However, the organization did not endorse the legislation. Instead, it said Congress could improve the bill while also supporting responsible innovation. That stance lets MCSA ease its objection without giving lawmakers a free pass. It consequently urged senators to pursue targeted changes.

🚨NEWS: The Major County Sheriffs of America (MCSA) has shifted to a “neutral” position on the Clarity Act after what it describes as “continued discussions in recent days regarding parts of Section 604,” aka the Blockchain Regulatory Certainty Act.

In a letter to Senate Banking… pic.twitter.com/24XIZTfWHR

— Eleanor Terrett (@EleanorTerrett) July 3, 2026

The shift could matter because law enforcement concerns had weighed on the bill’s prospects. Investor Mark Chadwick noted on X that the MCSA’s earlier opposition had stood out as a major roadblock. He said the path now looks clearer after the group stepped back.

Section 604 Keeps CLARITY Act in Focus

Section 604 remains the core issue in the dispute. The provision covers Blockchain Regulatory Certainty Act language tied to non-custodial developers and distributed ledger service providers. Supporters say it protects software developers when they do not control customer funds. At the same time, they say it preserves criminal liability for people who knowingly support illicit transactions.

However, several law enforcement groups had warned that the language could create loopholes. They argued that it could make investigations difficult by restricting the application of the money transmission rules. Critics also brought up concerns that mixers, tumblers, and some DeFi services could benefit. As a result, Section 604 received criticism from sheriffs and police groups.

MCSA said recent discussions narrowed those concerns. The group now believes the bill can support innovation while meeting law enforcement needs. But it stressed that lawmakers still have room to strengthen the text.

Sheriffs Press For a Stronger Local Role

MCSA asked Congress to amend Section 309, so state and local agencies have a formal role in the Treasury study. That study would examine decentralized finance and illicit finance risks under the bill. In addition, the group wants local agencies included in future advisory bodies and interagency working groups. It argued that those agencies handle many digital asset cases.

The organization also called for more training, technology, blockchain forensic tools, and investigative funding. MCSA warned that criminals increasingly use digital assets in fraud, ransomware, narcotics trafficking, child exploitation, organized retail theft, and terrorism financing. Bob Gualtieri said local agencies need tools, partnerships, and resources to identify offenders and trace proceeds. He added that they also need support to recover assets and protect victims.

The Clarity ACT debate continues on several fronts. Earlier this week, the National Organization of Black Law Enforcement Executives backed the bill. The text could add tools without compromising criminal authority, it said. Meanwhile, Galaxy Digital recently lowered its projection for passage this year due to a busy Senate calendar and slow public progress.