The U.S. Senate has included new provisions in the proposed CLARITY Act aimed at disrupting illicit cryptocurrency activity by North Korea’s Lazarus Group. The legislation would grant the U.S. Treasury authority to freeze suspicious digital asset transactions before funds can be moved, closing a regulatory loophole long exploited by illicit financial networks.
According to CoinDesk, the latest draft of the CLARITY Act, currently under final negotiations in the Senate, includes new anti-money laundering powers as well as ethics provisions designed to limit cryptocurrency-related conflicts of interest involving senior government officials, including the president.
The bill requires at least 60 votes to pass the Senate, meaning Republicans must secure support from at least 10 Democratic senators. Sen. Cynthia Lummis, one of the bill’s lead Republican negotiators, said she expects an agreement could be reached within days, allowing the legislation to move forward.
Lummis said the measure would directly address weaknesses that groups such as North Korea’s Lazarus have exploited.
“It gives the Treasury Department new authority to freeze suspicious transactions before the funds are actually transferred,” she said. “This will help law enforcement combat illicit finance and better protect consumers.”
The legislation also retains protections sought by the decentralized finance (DeFi) industry. Under the proposal, blockchain developers who do not directly control users’ assets would not be classified as money transmitters, exempting them from licensing and certain regulatory requirements.
The draft also outlines regulatory frameworks covering token issuance and fundraising, oversight of cryptocurrency exchanges, financial institutions’ use of public blockchains, and regulatory pathways for tokenized securities and futures markets.
Senate Majority Leader John Thune has indicated he intends to bring the CLARITY Act to the Senate floor before lawmakers begin their summer recess.
However, negotiations remain ongoing as lawmakers continue to debate concerns over potential conflicts of interest related to President Donald Trump’s cryptocurrency business interests, as well as opposition from the banking industry regarding yield-bearing stablecoin products. The outcome of those discussions is expected to determine whether the bill advances.