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The last few months have opened the eyes of the American public to global nefarious activity. Dark fleets have long traveled the high seas, carrying cargo outside of international laws, norms, and standards. This fleet has increased to a thousand-ship armada, allowing rogue regimes and criminal actors to avoid oversight and skirt the power of American financial systems as they pursue their illicit activities.
Never has that activity been as robust as it is today, and the opacity of cryptocurrency has empowered and emboldened criminals and tyrants like never before. The Islamic Republic of Iran provides a prime case study.
As America’s adversaries continue searching for methods to evade sanctions and undermine U.S. financial leverage, they have clung to the nefarious potential of underregulated cryptocurrency. Rogue actors increasingly recognize that the global dominance of the U.S. dollar and the reach of U.S. sanctions remain a powerful instrument of national power. America’s enemies actively seek ways to circumvent those controls through regulatory blind spots and loopholes, and cryptocurrency offers them a goldmine of possibilities.
The Digital Asset Market Clarity Act – nicknamed the Clarity Act – passed the House of Representatives with bipartisan support. The House’s passage of this important legislation reflects a powerful recognition that the United States needs a modern digital asset framework that supports innovation while protecting consumers and strengthening American competitiveness. Yet it must not be structured such that Iran can sail a ship through it.
Properly crafted legislation must stop the harmful financial tactics that malign actors exploit using digital currency. A well-crafted Clarity Act would slam the door shut on terrorists and rogue regimes who are currently avoiding sanctions and fueling illicit activities. Iran’s growing interest in digital finance to hold the world hostage in the Strait of Hormuz provides a compelling tipping point forCongress to act promptly and properly to snuff out the stench of rotten international and criminal activity that is profoundly harmful to U.S. interests. It is a national security imperative.
The Senate Banking Committee recently advanced this legislation without closing major gaps that incentivize and enable illicit activity. Significant problems remain with accountability, authority, oversight, and enforcement. As the full chamber of the U.S. Senate considers this important legislation, they must slam shut the door of malign activity and sew shut the gaps that hostile actors and malign regimes actively exploit.
The Senate best safeguards U.S. interests and bolsters national power with careful fixes in a few key areas. First, they must deliberately close loopholes that could allow sanctioned entities and state-backed proxies to exploit decentralized financial platforms. Second, the Senate must strengthen counters to money-laundering while enabling enforcement of sanctions compliance requirements across the portfolio of digital assets. Third, they must preserve the authority of American regulators to disrupt financial activities tied to rogue regimes, transnational thugs, narco-terrorists, human traffickers, and international criminal organizations. Finally, the Senate must carefully establish accountability standards for those parties who seek to facilitate transactions tied to sanctions evasion and hostile foreign operations.
This would create a Clarity Act worthy of the world in which we live.
Stories of ghost fleets and Iranian blackmail in the Strait of Hormuz have been flashing across our screens and populating our feeds as a dominant story in 2026. They are textbook examples of devilishly designed sanction-evasion networks to finance illicit activity and transport dirty capital. These international stories provide the perfect baseline upon which to judge the shape and structure of properly designed cryptocurrency and digital asset legislation.
America should lead in digital asset innovation, but we must not allow emerging technologies to weaken one of the most important tools of modern-day national power. The U.S. Senate must intentionally structure the Clarity Act with these issues at the forefront as they prepare to send it to the president’s desk. Anything less would undermine American strength, shortchange our financial leverage, and diminish our national security.
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