State AGs Oppose CLARITY Act Over Crypto Regulatory Concerns
Eighteen state attorneys general have spoken out against the CLARITY Act ahead of its Senate vote. Led by New York Attorney General Letitia James, they warned that the federal framework could change state authority over crypto markets.
The bipartisan group sent a letter to Senators Tim Scott and Elizabeth Warren before Tuesday's procedural vote. They expressed concerns about restrictions on investigations into cryptocurrency fraud and scams, which could leave investors with fewer enforcement options.
James' office has been involved in several high-profile cases against large cryptocurrency companies, including Coin Cafe, Gemini, Genesis, and KuCoin. The state has also recovered billions of dollars in settlements, refunds, and penalties from digital asset firms.
The attorneys general raised concerns about federal preemption, calling for Congress to ensure that federal rules do not automatically override existing state registration requirements. They also questioned the division of duties between federal agencies and states under the proposed plan.