An anti-human trafficking group warns that Section 604 of the Clarity Act could weaken accountability for crypto platform developers. The Alliance to End Human Trafficking argues the provision—stating developers who don't control user funds aren't money transmitters—may allow bad actors to evade liability when their software facilitates trafficking payments. Katie Boller Gosewisch, the Alliance's executive director, says the language could create reasonable doubt in prosecutions, even if that's not lawmakers' intent. Industry attorney Rebecca Rettig counters that Section 604 merely codifies existing FinCEN guidance and Bank Secrecy Act rules. She argues it doesn't create a new shield; developers who control user assets remain liable, and existing criminal laws like 18 U.S.C. § 1956 still apply to those who knowingly facilitate crime. The debate centers on whether to regulate for current technology or future abuse scenarios. Both sides agree on the need for stronger enforcement against human trafficking. Boller Gosewisch calls for restoring a federal trafficking coordinator and increasing relevant prosecutions. Rettig notes blockchain's transparency aids investigations. The dispute highlights ongoing tensions over developer liability as the Clarity Act moves through Congress.

Key facts

• Section 604 says developers who don't control user funds aren't money transmitters.
• Anti-trafficking group fears provision could create legal shield for bad actors.
• Industry lawyer argues Section 604 only codifies existing FinCEN guidance.
• Disagreement centers on regulating for current tech vs. future abuse scenarios.
• Both sides call for stronger enforcement against human trafficking.

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