James Slams CLARITY Act as Threat to State Crypto Enforcement

New York Attorney General Letitia James has expressed concerns about the CLARITY Act, warning that it could weaken state powers to prosecute fraud and enforce investor protection laws in the crypto market.

In written testimony submitted to a Senate committee, James argued that the bill would interfere with state investor protection laws and reduce the authority of state and local agencies to prosecute misconduct involving digital assets. She stated that 'this is a mistake' and that state authorities are responsible for about 98.8% of arrests nationwide, compared to roughly 1.2% by federal agencies.

James has asked Congress to add stronger investor protection, anti-money-laundering, and ethics safeguards to the legislation, which would establish a broader federal market structure for digital assets and divide oversight responsibilities between the Securities and Exchange Commission and the Commodity Futures Trading Commission.