CLARITY Act Clears Committee, But Money Laundering Question Hovers Over Crypto

The Senate Banking Committee voted 15-9 on Thursday to maneuver ahead on the CLARITY Act, a crypto market construction proposal that has been the topic of debate for some time now.

Nevertheless, simply forward of the vote, the Bank Policy Institute (BPI) put out a sequence of tweets on X about illicit crypto flows hitting $154 billion in 2025, including one other dimension to what was already an intensely debated subject on the extent of regulation in digital belongings.

Bank Advocates Lean on Crime Data

The timing of BPI’s thread drew consideration as a result of lawmakers had been concurrently debating amendments tied to stablecoin yield restrictions and enforcement requirements contained in the CLARITY Act markup session.

According to information from Chainalysis that the institute shared, in 2025, illicit crypto addresses acquired $154 billion. This was a 162% year-over-year enhance, pushed largely by a 694% soar in worth acquired by sanctioned entities.

Furthermore, the on-chain cash laundering ecosystem grew from $10 billion in 2020 to over $82 billion in 2025, with stablecoins, primarily Tether (USDT), now accounting for 84% of all illicit transaction quantity, displacing Bitcoin as the popular fee technique for criminals.

In a separate piece, the BPI argued that banks have spent a long time staffing tens of 1000’s of AML staff whereas crypto firms have been largely exempt.

It stated that the GENIUS Act imposed some obligations on US stablecoin issuers, however didn’t cowl overseas issuers working stateside. Tether, integrated in El Salvador, sits exterior that web.

The piece additionally cited the Islamic Revolutionary Guard Corps, whose crypto exercise reportedly reached over $3 billion in 2025, representing roughly 50% of Iran’s complete crypto ecosystem by This fall of that yr.

According to the BPI, unhosted wallets, cross-chain bridges, and mixers are “particularly designed to frustrate tracing and overtly marketed as such.”

The stablecoin debate has develop into one of the contentious components of the CLARITY Act negotiations, with banking teams, together with members of the American Bankers Association, spending weeks lobbying senators to tighten language proscribing yield-bearing stablecoins.

As CryptoPotato reported earlier this week, banking teams sent Senate places of work greater than 8,000 letters forward of the markup vote, whereas the crypto advocacy group Stand With Crypto stated its supporters had contacted lawmakers practically 1.5 million occasions in assist of the invoice.

But regardless of greater than 40 amendments proposed by Senator Elizabeth Warren and procedural disputes throughout the listening to, the laws superior with assist from Democratic senators Ruben Gallego and Angela Alsobrooks.

The Counter-Argument

While the BPI is demanding stricter anti-money laundering legal guidelines and sanctions rules to be utilized to crypto the identical means it has been achieved to the standard banking sector, information shared by Binance Research on May 14, offered some pushback to its claims.

According to Binance, trapped illicit funds on-chain have grown yearly as a result of much less is being efficiently laundered, no more.

Their report confirmed that extra exit factors are being blocked by KYC and extra balances are being frozen by stablecoin issuers. Even the biggest mixers have been processing at most $10 million per day.

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