By Dean Maddox, Public Safety & Crime Reporter

With the Senate expected to vote on the cryptocurrency market structure bill known as the CLARITY Act either before lawmakers leave for the August recess or soon after they return to Capitol Hill, national law enforcement organizations and crime victim advocates are intensifying their calls for Congress to strengthen the legislation’s anti-fraud protections.

The measure, backed by the digital asset industry as a framework to provide regulatory certainty for cryptocurrencies, has drawn increasing scrutiny from organizations that investigate financial crimes and assist victims of internet-enabled fraud.

In a letter to the Senate Banking Committee, the National Sheriffs’ Association urged lawmakers to preserve the investigative authorities needed to combat cryptocurrency-related crime, warning that any regulatory framework should not weaken efforts to trace illicit transactions or recover stolen assets.

“Given that scammers defraud victims—often the elderly—of billions of dollars each year, it’s time to stand up for victims, potential victims, and law enforcement,” the association wrote. The group said investigators must retain the ability to “follow transactions and trace funds” and, when legally authorized, “freeze accounts and seize and recover funds for victims.”

The National Sheriffs’ Association is among several public safety organizations raising concerns about the legislation, including the National District Attorneys Association, the National Association of Assistant United States Attorneys, the International Association of Chiefs of Police, the National Association of Police Organizations and the Association of State Criminal Investigative Agencies. Consumer advocates and organizations representing victims of financial crime have also urged senators to strengthen safeguards against money laundering, fraud and market manipulation before advancing the legislation.

Those organizations argue that while Congress should establish clear rules for digital assets, any framework should include stronger anti-money laundering requirements, customer identification standards and enforcement tools that allow investigators to pursue increasingly sophisticated criminal enterprises operating online.

Supporters of the CLARITY Act say the legislation is needed to provide regulatory certainty, encourage innovation and keep blockchain investment and technology development in the United States. They maintain that existing federal criminal laws will continue to apply to digital asset crimes and that the legislation provides long-overdue oversight of cryptocurrency markets.

With the Senate vote approaching, political attention is increasingly turning to California Democratic Sens. Alex Padilla and Adam Schiff, whose votes could prove influential if Senate leaders face a closely divided chamber. Both senators represent a state that is home to the nation’s largest technology sector while also accounting for some of the country’s highest reported losses from cryptocurrency investment scams and other internet-enabled financial fraud.

Whether the legislation reaches the Senate floor before the August recess or immediately after lawmakers return, the coming debate is expected to focus not only on fostering innovation but also on whether Congress has done enough to protect consumers, assist crime victims and preserve the investigative tools law enforcement agencies say are essential to combating digital financial crime.