18 State Attorneys General Oppose CLARITY Act Ahead of Senate Vote: What Do They Want?

Eighteen state attorneys general opposed the current text of the CLARITY Act ahead of Tuesday’s Senate vote.

New York Attorney General Letitia James, along with 17 other state attorneys general, argued in a call to Congress that the CLARITY Act could weaken states’ authority to pursue crypto fraud and investor protection cases. The bipartisan coalition requested the preservation of states’ existing oversight and registration authorities over digital assets.

James and the other attorneys general sent the letter to Senators Tim Scott and Elizabeth Warren.

Attorneys General Seek to Protect State Authority

At the center of the coalition’s objection is the claim that the bill, in its current form, could make it harder for states to conduct crypto fraud investigations and pursue cases aimed at protecting investors. The attorneys general stated that state agencies serve as the first line of defense against crypto fraud.

The letter also suggested that the bill could expand the Securities and Exchange Commission’s (SEC) ability to override state-level digital asset registration systems. The coalition requested that Congress work on a text that would protect states’ existing registration and enforcement powers.