New York Attorney General Warns CLARITY Act Will Weaken States' Ability to Regulate Crypto, Senate Legislation Faces Pressure

TechFlow News, July 28. According to The Block, New York Attorney General Letitia James submitted written testimony to the Senate Committee on Homeland Security and Governmental Affairs on July 27 local time, warning that the "Digital Asset Market Clarity Act" (Clarity Act) will interfere with and supersede state investor protection laws, weakening states' ability to prosecute fraudulent conduct. James also called on Congress to strengthen anti-money laundering (AML) and ethics provisions, requiring federal officials not to regulate industries from which they derive profit during their tenure and within one year after leaving office, and pushing for DeFi platforms to assume anti-fraud intermediary responsibilities.

Currently, the bill's progress in the Senate has stalled, with Democrats requesting strengthened ethics provisions targeting crypto conflicts of interest related to the Trump family, while the Congressional recess is approaching (the Senate is scheduled to recess on August 7), leaving little time remaining in the legislative window.