New York AG Warns CLARITY Act Would Undermine State Crypto Crackdown

New York Attorney General Letitia James has expressed strong opposition to the CLARITY Act, which she believes would limit state crackdowns on cryptocurrency fraud. In written testimony delivered to a Senate committee, James argued that the bill interferes with and preempts states' investor protection laws, diluting their ability to prosecute fraud.

James noted that state and local law enforcement agencies are responsible for around 98.8% of arrests across the country, while federal authorities account for only about 1.2%. She warned that the CLARITY Act would 'neuter' state and local law enforcement by preempting states and preventing them from fully prosecuting rampant fraud and violations of law in the cryptocurrency marketplace.

The Senate Majority Leader, John Thune, has signaled that he may set a floor time for the crypto bill before the August recess, despite concerns from banks over the stablecoin yield provision. Stakeholders continue to voice their support for the CLARITY Act, with brokerage firm Charles Schwab backing the bill over the weekend.