Crypto regulation: NY AG Letitia James warns CLARITY Act would strip state enforcement powers, as Senate weighs floor vote before August recess. Schwab backs bill.
New York Attorney General Letitia James has urged the U.S. Senate to reject the CLARITY Act, arguing the crypto market structure bill would strip state authorities of their ability to police digital-asset fraud. Her opposition arrived as Senate Majority Leader John Thune weighs bringing the legislation to the floor before the August recess.
In written testimony submitted to a Senate committee, James said the CLARITY Act would override state investor protection laws and significantly reduce the power of state attorneys general and local prosecutors to pursue fraudulent activity in the crypto industry. She argued that limiting state enforcement is a mistake given the role local authorities play in financial crimes. State and local law enforcement agencies handle roughly 98.8% of all arrests nationwide, according to James's testimony, while federal authorities account for only about 1.2%.
Her concerns mirror those of several Democratic senators who have argued that leaving enforcement solely to the Department of Justice would be insufficient. They are pushing for state prosecutors to retain their enforcement powers as bipartisan negotiations continue.
Thune indicated he may schedule floor consideration of the CLARITY Act before the August recess even if support for cloture remains uncertain. The bill faces stiff competition for Senate floor time, with lawmakers prioritizing other measures such as the SAVE America Act and additional sanctions on Russia. Thune also acknowledged that banking groups continue to lobby against the bill's stablecoin yield provisions, a hurdle that could lead to numerous amendments if the bill reaches the floor.
Despite the pushback from some lawmakers and regulators, major financial firms have backed the legislation. Charles Schwab recently endorsed the CLARITY Act, adding to industry support. Schwab, which carries an Alpha Score of 70 (Moderate) in the Financials sector, has a stock page on AlphaScala.
The Goldman Sachs CEO has also voiced support for the CLARITY Act, even as banks fight the stablecoin yield provisions that Thune cited as a sticking point. The Senate's timeline for a vote remains uncertain, with lawmakers racing to finish business before the August break.
Drafted by a large language model from the source reporting linked above, then screened by automated publishing checks. It is not read by a journalist before publication. Some articles cite our Alpha Score. Verify prices and figures against the original source. Educational coverage, not personalized advice.