18 State AGs Veto CLARITY Act Amid Fears Over Federal Preemption
A bipartisan group of state attorneys general from 18 states has expressed opposition to the CLARITY Act, a proposed federal framework for regulating digital assets. The lawmakers, led by New York Attorney General Letitia James, have sent a letter to Senators Tim Scott and Elizabeth Warren urging them to rethink provisions that could impact state authority over crypto markets.
The attorneys general are concerned that the law could lead to confusion about state enforcement authority, particularly when it comes to restrictions on investigations into cryptocurrency fraud and scams. They argue that removing state authority would leave investors with fewer options for enforcing their rights.
The CLARITY Act has undergone significant changes since its introduction, including the addition of new provisions related to ethics, stablecoins, developer protections, and consumer protection rules. However, despite these revisions, the attorneys general remain opposed to the bill's impact on state power.