State AGs Slam CLARITY Act as Federal Framework Threatens State Authority

A group of 18 state attorneys general has expressed opposition to the CLARITY Act, a bipartisan bill aimed at providing a federal framework for regulating digital assets. Led by New York Attorney General Letitia James, the coalition sent a letter to Senators Tim Scott and Elizabeth Warren, warning that the law could limit state authority over crypto markets.

The attorneys general raised concerns about restrictions on investigations into cryptocurrency fraud and scams, as well as the potential for federal preemption of existing state registration requirements. They also called for clearer protections for state consumer laws and a more defined division of duties between federal agencies and states under the proposed plan.

Proponents of the CLARITY Act argue that it would provide much-needed clarity for digital asset businesses, reducing regulatory uncertainty and promoting innovation in the sector.