Anti-trafficking group says CLARITY Act’s Section 604 could weaken accountability

Latest developments: The Alliance to End Human Trafficking is urging lawmakers to revisit Section 604 of the Clarity Act, arguing the provision could make it harder to hold some crypto platform developers accountable when their technology is used to facilitate human trafficking.

• Katie Boller Gosewisch, executive director of the Alliance to End Human Trafficking, said her organization’s primary concern is language stating that developers who do not control user funds are not money transmitters.
• Boller Gosewisch argued the provision could allow some third-party platform developers to “hide behind” a lack of liability if their software is used to facilitate trafficking-related payments.
• The Alliance and Catholic Charities recently sent a letter to Senate Majority Leader John Thune and Senate Minority Leader Chuck Schumer outlining their concerns with the legislation.
• Boller Gosewisch joined Rebecca Rettig and Renato Mariotti on CoinDesk’s The Policy Protocol.

The debate: Rettig argued Section 604 reflects longstanding U.S. anti-money laundering policy rather than creating a new legal shield.

• Rettig said the provision simply clarifies that developers who do not control customer assets are not considered money transmitters, consistent with existing Bank Secrecy Act and FinCEN guidance.
• She argued the bill preserves liability for parties that do control user funds and does not eliminate exposure under other criminal statutes.
• She also pointed to existing money laundering laws, including 18 U.S.C. § 1956, as tools prosecutors can use against developers who knowingly facilitate criminal activity.