AGs Vow to Block CLARITY Act Unless States' Powers Are Preserved

New York State Attorney General Letitia James is leading a bipartisan coalition urging the U.S. Senate to reject a major cryptocurrency bill, warning it would limit states' ability to oversee the securities and commodities market.

The Senate is poised to hold a procedural vote Tuesday on whether to move forward with the so-called CLARITY Act, which would create a new federal regulatory framework for the $2.3 billion cryptocurrency market.

In a letter to the co-chairs of the Senate Committee on Banking Sens. Tim Scott and Elizabeth Warren, James and 16 other AGs called on the committee not to approve the current version of the CLARITY Act unless states' powers to police the market and protect investors are fully preserved.

The five-page letter urges senators to 'expressly preserve the police powers of the states and ensure that the states remain armed with the tools necessary to protect the American people from predatory scammers.'

The attorneys general cited more than 330 anti-fraud enforcement actions against cryptocurrency scammers initiated by states, which shut down fraudulent websites and schemes.