State AGs Warn CLARITY Act Would Embolden Scammers, Weaken State Enforcement

A bipartisan coalition of 18 state attorneys general, led by New York's Letitia James, is urging Congress to reject the CLARITY Act. The bill, which is set for a key procedural vote on Tuesday, would give the SEC expanded power to override state registration rules and weaken states' ability to pursue crypto fraud and investor-protection cases.

According to James, the current form of the bill 'would embolden scammers.' The coalition argues that the legislation could trigger legal disputes over regulatory oversight due to unclear language. They are calling on Congress to preserve existing state enforcement authority and clarify this language.