State AGs Oppose Clarity Act Ahead of Senate Vote

The CLARITY Act, a landmark piece of US crypto legislation, is facing opposition from a bipartisan group of state attorneys general ahead of its crucial Senate vote on Tuesday. The bill aims to establish a federal market structure for digital assets, clarify when crypto assets fall under securities or commodities laws, and delineate oversight responsibilities between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

The state attorneys general, led by New York Attorney General Letitia James, argue that the CLARITY Act would weaken their authority to police the crypto industry. In a letter to Senate Banking committee leaders, they claim that while the bill reserves certain powers for states to prosecute fraud, the language is often ambiguous and unclear.

President Donald Trump has agreed to most of a bipartisan proposal to strengthen ethics restrictions around public officials' crypto interests, according to various reports. The revised bill would require officials with a 'significant' financial interest in a crypto issuer to divest or place the interest in a blind trust, and give state attorneys general a role in enforcing new ethics restrictions.

However, the concessions have not resolved all of the opposition, as Republicans described the revised legislation as their 'last, best and final offer' to Democrats ahead of Tuesday's vote.