The Federal Law Enforcement Officers Association has endorsed the central objectives of H.R. 3633, the Digital Asset Market Clarity Act, while calling on the Senate to adopt several targeted revisions intended to protect federal investigative and prosecutorial powers.
FLEOA, which represents more than 34,000 active and retired federal law enforcement officers across more than 65 agencies, outlined its position in a letter submitted to the U.S. Senate Committee on Banking, Housing, and Urban Affairs.
The association’s support is significant because the debate over digital asset regulation is no longer limited to questions of market structure, investor protection or technological competitiveness. It increasingly concerns the ability of federal agencies to trace illicit transactions, enforce sanctions and disrupt financial networks connected to fraud, organized crime and terrorism.
H.R. 3633 seeks to create a clearer regulatory framework for digital assets in the United States. FLEOA said the legislation represents meaningful progress toward balancing responsible innovation with public safety, particularly as blockchain-based markets become more integrated with the broader financial system.
At the same time, the association warned that regulatory clarity should not come at the expense of established criminal enforcement standards.
Among its recommendations, FLEOA urged lawmakers to provide a clearer definition of accountability within decentralized financial systems. The organization also called for safeguards against artificial decentralization, a structure in which companies or individuals could claim that a platform is decentralized while continuing to exercise meaningful control over its operations.
That issue deserves close attention. Decentralization can serve a legitimate technical and economic purpose, but it should not become a legal shield for operators who retain authority over a platform while disclaiming responsibility for misconduct conducted through it.
FLEOA also recommended revising the legislation’s “specific intent” language and replacing it with the knowledge standard already recognized under federal law. According to the association, preserving existing liability standards would reduce the risk that prosecutors face an unnecessarily high burden when pursuing sophisticated financial crime cases.
The distinction is not merely technical. Requiring proof of a narrowly defined intent can complicate cases involving layered transactions, automated protocols, intermediaries and deliberately fragmented organizational structures. A knowledge-based standard may provide investigators and prosecutors with a more workable framework when evidence shows that a person understood how a system was being used.
The association further asked Congress to state explicitly that the legislation does not restrict established federal investigative powers or interfere with compliance with lawful subpoenas, warrants, court orders and other judicial processes.
Such language would help ensure that the creation of a new digital asset framework does not produce unintended conflicts with existing criminal, anti-money laundering, counterterrorism financing and sanctions enforcement authorities.
FLEOA also encouraged sustained collaboration among Congress, the Department of Justice, the Department of the Treasury, the Financial Crimes Enforcement Network, federal law enforcement agencies, prosecutors and digital asset industry participants.
That collaboration will be essential. Digital asset regulation must be precise enough to give responsible businesses a predictable operating environment, but flexible enough to address technologies and financial structures that can change more quickly than the legislative process.
A durable framework should distinguish between legitimate decentralized innovation and systems designed to obscure control, ownership or accountability. It should protect software development and lawful financial activity without creating avoidable enforcement gaps.
“FLEOA remains committed to supporting policies that allow the United States to lead in blockchain and digital asset innovation while ensuring federal law enforcement retains the authorities necessary to investigate and prosecute sophisticated financial crimes,” said FLEOA National President Mathew Silverman.
FLEOA’s position reflects a broader principle that should guide the Senate’s consideration of H.R. 3633. Innovation and enforcement are not opposing goals. A credible digital asset market depends on rules that support legitimate development while ensuring that criminals cannot exploit regulatory ambiguity, technical complexity or claims of decentralization to avoid accountability.
The Senate now has an opportunity to refine the legislation without abandoning its core purpose. Incorporating carefully drafted protections for existing investigative authorities and criminal liability standards could strengthen the bill, improve regulatory certainty and reinforce confidence in the United States digital asset market.
FLEOA said it plans to continue working with Congress as H.R. 3633 moves through the legislative process.
The Federal Law Enforcement Officers Association represents more than 34,000 registered members serving across more than 65 federal agencies. The nonpartisan organization does not endorse political parties or candidates and advocates for the federal law enforcement community throughout the legislative process.
