State AGs Urge Senate to Reject CLARITY Act Over Crypto Industry Oversight Concerns
The CLARITY Act is set to face another hurdle in its passage through the US Senate as a bipartisan group of state attorneys general has come out against the bill. The legislation, which aims to establish a federal market structure for digital assets and clarify when they fall under securities or commodities laws, has been met with opposition from 18 state attorneys general led by New York Attorney General Letitia James.
The letter sent by the group argues that the CLARITY Act would weaken state oversight of the crypto industry by making it harder for states to take action against companies accused of fraud or misconduct. They claim that the language in the bill is often ambiguous, unclear, or confined in ways that deprive states of their ability to police the industry.
The opposition from the state AGs adds another complication for the legislation, which has already faced several sticking points. Despite this, President Donald Trump has agreed to most of a bipartisan proposal to strengthen ethics restrictions around public officials' crypto interests, including requiring officials with significant financial interests in a crypto issuer to divest or place the interest in a blind trust.
The CLARITY Act is considered a landmark piece of US crypto legislation and its passage would have significant implications for the industry. The bill's supporters believe that it would provide much-needed clarity on regulatory roles and responsibilities, while opponents argue that it would weaken state oversight.