Nearly 100 Catholic Leaders Oppose CLARITY Act Over Trafficking Safeguard Provisions

Close to 100 Catholic bishops and church leaders have sent a letter to Senate leadership opposing the CLARITY Act, arguing that one of its core provisions would weaken federal safeguards against human trafficking and other financial crimes ahead of a Senate floor vote.

The letter, addressed to Senate Majority Leader John Thune and Senate Minority Leader Chuck Schumer, was sent Tuesday by the Alliance to End Human Trafficking (AEHT), an umbrella organization backed by Catholic religious congregations. Punchbowl News first reported the letter, which The Block separately obtained. Signatories include leaders from the Sisters of Saint Joseph of Philadelphia, Sisters of the Blessed Virgin Mary, and the Congregation of Sisters of St. Agnes.

Section 604 Dispute

The group's objection centers on Section 604 of the CLARITY Act, which codifies the Blockchain Regulatory Certainty Act (BRCA). That provision would establish that non-custodial blockchain software developers are not money transmitters and bear no liability for crimes committed by users of their platforms. The Catholic-affiliated coalition contends the language would introduce regulatory gaps exploitable by traffickers, organized crime networks, and sanctions evaders.

"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," the letter states, as reported by The Block. The letter warned the provision "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.”

The AEHT also called on Congress to weigh Section 604 against parallel legislative work, writing that "policymakers should avoid creating unintended loopholes that could undermine" anti-trafficking efforts underway in other legislation, including the Frederick Douglass Trafficking Victims Prevention and Protection Reauthorization Act.

Industry Pushback

Digital Chamber CEO Cody Carbone pushed back on Tuesday. "Let's be very clear about what Section 604 does," Carbone said in a post on X. "Section 604 says NON-CUSTODIAL developers are not money transmitters. Those who are building tools are different than those running banks."

The Digital Chamber separately confirmed its staff were on Capitol Hill on Tuesday meeting with senators, including Lummis, to advocate for the bill. "Today, our team and members are on Capitol Hill, meeting with legislators and advocating for the Clarity Act to bring a clear roadmap to digital asset market structure," the organization posted on X.

The BRCA provision has been a sustained flashpoint in CLARITY Act negotiations. Critics see it as a potential shield for illicit activity; backers argue it is essential to prevent non-custodial developers, who cannot control how users interact with their software, from facing the same regulatory burden as banks and payment processors.

Widening Opposition Coalition

The AEHT letter adds a religious-institutional voice to an opposition bloc that already includes law enforcement and civil society groups. Former national security officials have pressed Senate leadership to pass the bill, while gaming industry groups, tribal organizations, and unions have separately pushed senators to strip sports prediction-market provisions. Banks have also raised concerns about the bill's stablecoin framework.

On the other side, more than 1,200 tech companies and over 200 crypto firms have publicly urged Senate passage.

The CLARITY Act sits on the Senate floor calendar, eligible for a vote whenever leadership schedules one. The bill needs at least seven Democratic votes to clear the 60-vote cloture threshold. The August recess has emerged as a hard deadline; failure to clear cloture before then would push negotiations into the fall, with November midterms complicating the vote math further. Senator Lummis has pressed for a Senate floor vote before the recess, and the House has set a CLARITY Act field hearing for July.

Prediction markets on Polymarket assign 42% probability that President Trump signs the CLARITY Act before the end of 2026, per crypto.news.