New York Attorney General (AG) Letitia James is leading an 18-state bipartisan coalition, urging the US Congress to vote against the CLARITY Act tomorrow. Attorneys General supporting the motion hail from Washington, California, Arizona, Massachusetts, and New Jersey, among others.
In a September 14 letter addressed to the Senate Banking Committee Chairman Tim Scott and member Elizabeth Warren, James states the reasons for the call against the crucial piece of crypto legislation.
James: Why Senate Should Reject the CLARITY Act
James warns that the bill would empower “predator scammers,” worsening the current epidemic of online crypto scams. According to her, the anti-fraud language is vague, offering legal loopholes to stall states’ enforcement actions.
Secondly, James says the bill would strip states of their authority to “oversee the securities and commodities markets to protect everyday Americans.” While the US Securities and Exchange Commission (SEC) has been working to provide legislative guidance while a decision on the CLARITY Act looms, the law enforcer says the agency’s position could override states’ securities registration requirements.
Finally, James says the bill would disrupt states’ regulators’ role as the first line of defense. Here she points out that the states have brought 330 anti-fraud actions against scammers since 2017.
A note on X by James reads in part:
“Innovation can’t come at the expense of protecting Americans’ wallets.”
What next?
The AGs’ statement comes shortly after Republicans released their 11th-hour version of the proposed Clarity Act. It includes language that gives state AGs a role in enforcing conflict-of-interest bans on federal officials. The letter from the cross-party coalition, however, expresses high dissatisfaction with these provisions.
Tomorrow’s Capitol Hill vote will now determine the fate of the legislation, with a likely impact on the crypto market. Bitcoin now hovers around $77,000, bracing for the vote and Wednesday’s Fed interest rate decision.