NY Attorney General Urges Congress To Toughen Clarity Act, Preserve State Crypto Powers
By CU Today Staff —
WASHINGTON— New York Attorney General Letitia James is urging Congress to rewrite the pending Digital Asset Market Clarity Act, arguing the legislation would weaken states' ability to combat cryptocurrency fraud and should include stronger consumer protections, anti-money laundering requirements and ethics restrictions on public officials.
In written testimony submitted Monday to the Senate Homeland Security and Governmental Affairs Committee's Permanent Subcommittee on Investigations, James said the proposal would preempt key state enforcement powers by shifting primary oversight of digital assets to federal regulators. She warned the change would "reduce the number of cops on the beat" as cryptocurrency scams continue to grow, noting complaints received by her office have tripled over the past three years and reported losses have reached nearly $500 million in New York alone.
James called on lawmakers to preserve concurrent state enforcement authority, require cryptocurrency platforms to comply with anti-money laundering, know-your-customer and cybersecurity requirements, mandate market surveillance to detect fraud and manipulation, and hold crypto companies financially liable when they fail to protect consumers. She also urged Congress to prohibit anonymous cryptocurrencies from being converted into U.S. dollars and to bar elected officials and recent government officials from participating in cryptocurrency businesses they regulate, arguing stronger safeguards are needed to prevent conflicts of interest and foreign influence.
The testimony comes as Senate negotiators continue work on the Clarity Act, legislation intended to establish a comprehensive federal framework for digital asset markets. The latest Senate draft includes new ethics provisions affecting senior government officials, but the measure remains the subject of negotiations ahead of an expected Senate vote before lawmakers leave for the August recess.
Originally reported by CU Today.