CLARITY Act would weaken state fraud powers, James warns

New York Attorney General Letitia James has urged Congress to revise the CLARITY Act, warning that the crypto market structure bill could restrict states from prosecuting fraud and enforcing investor protection laws. Summary James said the bill could preempt state investor protection laws and weaken local enforcement. State and local authorities account for about 98.8% of arrests nationwide, according to her testimony. Senate Republicans need 60 votes to advance the legislation through the cloture process. Banking, ethics and enforcement disputes remain unresolved before the Senate’s August recess. James challenges the CLARITY Act’s enforcement rules James raised the concerns in written testimony submitted to a Senate committee as lawmakers continued negotiations over the federal crypto bill. She argued that the CLARITY Act would interfere with state investor protection laws and reduce the authority of state and local agencies to prosecute misconduct involving digital assets. “This is a mistake,” James wrote. The New York attorney general said state and local law enforcement agencies conduct most enforcement work across the United States. According to figures included in her testim...