No one in crypto wants to see this technology abused to facilitate harmful activity. We understand that KYC/AML is a proven preventative measure to accomplish that. Our concern is that it must be applied at the layer that makes sense. Sec 604 in CLARITY aims to lay the groundwork for this. What Sec 604 says is that a non-custodial software developer cannot be treated as a money transmitter, meaning they are not required to apply Anti Money Laundering (AML) mandates such as Know Your Customer (KYC) in the services (Frontends, UIs) they provide. For anyone touching law enforcement or the catholic orgs that oppose this section, I'd like to provide a list of reasons why I believe Sec 604 makes sense: 1. Non-Custodial Services Don't Gather Customer Data- These services work as routers that simply provide a nice interface for users to interact with decentralized financial apps. Treating the developers as money transmitters would require them to report data their services are not built to collect. 2. Increased liability- Forcing these services to collect data creates centralized targets developers now must manage. This brings on more liability for a service that was supposed to act as an interface for accessing defi, not an intermediary. 3. Asymmetric Compliance- Immutable smart contracts are accessible and exist publicly available on the blockchain regardless. And with the rise of AI and open source models even non-technical bad actors can interact with them without using a gated interface (Frontends/UIs). Requiring KYC/AML will not force bad actors into a supervised gateway, it only forces regular users into more supervision. 4. Offshore Migration- US facing providers will either have to geo-block (pushing users to unaccountable foreign services and VPNs) or absorb regulatory liability and overhead. Both push users and developers outside of the US and do the exact opposite of bringing this technology onshore in a safe and reasonable manner. 5. Everything on the Blockchain is Public- For most public blockchains, every transaction and wallet balance is completely transparent and trackable giving law enforcement durable, permanent visibility. There are already top onchain forensics teams like Chainalysis and Elliptic that operate here. Even as blockchains seek to build native privacy eventually, at crypto's current state implementing KYC at this layer will have little to marginal benefits in what can be deciphered from blockchains. The letter states that law enforcement's concerns aren't with developers who publish code but with exemptions broad enough to also shield mixers and custodial money movers. That's fair, but it's an argument about line drawing, not about the viability of 604 and others. If there is language change, as long as non-custodial, non-controlling developers and their services are exempt and control is defined so that any custodial service that actually moves or obfuscates crypto is subject to AML/KYC this makes sense. In my opinion, a more effective strategy is to regulate the chokepoints, not the interfaces. AML/KYC makes sense at custodial on/off ramps because they already collect user information and manage significant regulatory overhead/liability. A change of language that pushes developers towards classification as a money transmitter is directly at odds with safely bringing this technology onshore as it reflects a mismatch between how these services work and what the money transmitter framework requires. Additionally, it encourages offshore migration while only providing marginal benefits to law enforcement's existing capabilities. I encourage all involved parties to consider these points. We are on the same page when it comes to safety, but it is important to ensure that safety is implemented thoughtfully and without creating a regulatory environment that is unworkable with the growth of this technology.