Over the course of my career, I have devoted myself to upholding the rule of law in Maryland’s courtrooms and public institutions. As a former deputy state’s attorney for Anne Arundel County, I worked closely with law enforcement and handled complex criminal matters that required careful investigation, coordination and a clear understanding of how criminals exploit weaknesses in our legal and financial systems. For more than two decades, I have also run my own law firm, representing Marylanders in hundreds of criminal and civil trials. Throughout my career, including appointments by both Democratic and Republican governors, I have been guided by a simple principle: The law must apply equally, and without exception.
That principle is directly implicated by the cryptocurrency market structure bill now before the U.S. Senate, known as the CLARITY Act.
Maryland’s Sens. Angela Alsobrooks and Chris Van Hollen are uniquely positioned to evaluate this legislation. Both are attorneys, and Alsobrooks, having served as state’s attorney for Prince George’s County, understands firsthand how critical strong financial tracing tools are for prosecutors. Van Hollen has long championed accountability and consumer protection in financial markets. Their legal backgrounds give them a clear appreciation for what is at stake.
As currently drafted, the CLARITY Act would create a significant gap in our financial enforcement framework. One of its most troubling flaws is the failure to apply Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) standards to cryptocurrency businesses at the same level required of traditional financial institutions. These standards are not bureaucratic hurdles; they are essential tools that allow investigators and prosecutors to trace illicit funds, uncover tax evasion and disrupt organized criminal activity.
Law enforcement organizations across the country share these concerns. The International Association of Chiefs of Police, the National Sheriffs’ Association and the Association of State Criminal Investigative Agencies have all warned that the bill’s “DeFi Loophole,” which exempts decentralized platforms from registration and oversight, would weaken investigative capabilities, hinder the tracing of stolen funds and expose consumers to predatory scams and rampant hacks, which makes it clear that the bill should apply BSA-AML regulations to all crypto platforms.
The scale of the threat is already visible. In 2024, according to the FBI, consumers reported losses of $9.3 billion in crypto-related financial crime, a figure that almost certainly underestimates the true impact due to low reporting rates. And that number does not include online hacks, theft, illicit finance or the widespread unfair and deceptive practices that have become common in the digital asset marketplace.
When digital assets are used to bypass the rule of law, evade accountability and undermine regulatory enforcement, they pose a direct threat to our national security and to Maryland families.
Alsobrooks and Van Hollen have consistently demonstrated principled leadership on financial regulation and consumer protection. As the Senate considers the CLARITY Act, I urge them to work to amend the bill so that full, mandatory banking-level compliance standards apply across the entire digital asset ecosystem. Until those safeguards are firmly in place, the legislation should not advance.
Thomas J. Fleckenstein is an attorney and former deputy state’s attorney for Anne Arundel County.
