Senate Ramps Up CLARITY Act Push Amid NY AG Warning

New York Attorney General Letitia James is warning lawmakers about the potential consequences of passing the CLARITY Act, which would shift oversight of digital assets from state and local law enforcement to the Commodity Futures Trading Commission (CFTC).

The Senate is moving quickly towards a procedural vote on the legislation, with hopes for a final passage by the end of the week.

James testified that the CLARITY Act would limit her office's ability to pursue enforcement actions against crypto platforms and hamper state regulation, which she believes is necessary to prevent financial crises.

She proposed a six-point framework that would mandate compliance with anti-money laundering and cybersecurity rules, ban untraceable crypto conversions, and hold platforms accountable for fraud.