Attorneys General Slam Revised Crypto Bill as Weak on State Enforcement

New York Attorney General Letitia James has led 17 bipartisan attorneys general in urging senators to reject the Clarity Act, a cryptocurrency bill currently being debated. The group argues that the legislation could weaken states' ability to investigate fraud and create new opportunities for crypto scammers.

James and her colleagues are concerned that unclear federal rules could limit state enforcement powers, leaving investors with fewer protections. The Senate Republicans released a revised version of the 600-page legislation on Sunday, which seeks to address several concerns raised by Democrats during negotiations.

The latest draft gives state attorneys general enforcement powers over conflict-of-interest rules for public officials and provides an 18-month circuit breaker for certain stablecoin rewards. However, James argues that the SEC could still override state registration authority, highlighting a dispute between federal oversight and states' traditional enforcement role.