Clarity Act Stumbles: Crypto Bill Faces Fresh Hurdle Before Crucial Senate Vote

The US crypto bill, known as the Clarity Act, has hit another obstacle before its upcoming Senate vote. The bill aims to establish a federal framework for digital assets and reduce regulatory uncertainty.

New York Attorney General Letitia James and 17 other attorneys general have expressed opposition to the bill. They argue that federal preemption could weaken state registration authority and make it harder for state prosecutors to enforce fraud cases.

The coalition of attorneys general, which includes those from California, Illinois, Arizona, Kansas, Ohio, Wisconsin, and the District of Columbia, has called on lawmakers to reject the crypto market-structure bill. They are concerned that the language allowing the Securities and Exchange Commission to preempt state registration authorities could create legal uncertainty around state securities oversight and state fraud cases.

The revised Clarity Act update includes new ethics safeguards, such as conflict-of-interest restrictions for covered federal officials and requirements for divestment or qualified blind trusts. However, some crypto industry members argue that these rules weaken developer protections.