New York State Attorney General Letitia James stated that the Cryptocurrency Market Structure bill (CLARITY Act) would restrict the activities of law enforcement agencies at the state level, complicating the fight against fraud in the crypto sphere. In this regard, she called on Congress to introduce stricter regulations for this sector.
According to James, in New York State alone, the number of complaints regarding cryptocurrency fraud has tripled in recent years. Furthermore, the volume of losses from such activities over five years, according to the Attorney General's office, amounts to about $500 million. And this is only in the state of New York, she emphasized.
The Attorney General believes that the CLARITY Act would undermine the ability of local authorities to pursue criminals in this field and impose sanctions against unscrupulous counterparties. She also advocates for Congress to impose a complete ban on elected officials and recently departed government employees from regulating the crypto sphere.
Instead, she proposes passing a bill with the following points:
- Require crypto companies to comply with anti-money laundering (AML), counter-terrorist financing, and user verification measures;
- Create a closed market inaccessible to foreign companies;
- Prohibit the conversion into dollars for those crypto assets whose origin cannot be traced, including privacy tokens;
- A ban on exempting crypto assets from the provisions of money transmission, commodity, and securities laws;
- Require crypto companies to monitor abnormal activity and report it;
Require platforms and intermediaries to protect Americans from fraud and scams, and hold them accountable for failing to meet this requirement.
"The CLARITY Act aims to interfere with and preempt state investor protection laws, as well as weaken our ability to pursue fraud. This is a mistake. The lion's share of law enforcement work in this country is done by state and local authorities," James summarized.
Also, in the Attorney General's opinion, the framework bill for the crypto market should aim for maximum transparency.
At what stage is the CLARITY Act currently?
The bill has been sent to the Senate for further consideration. If approved, the bill will return to the House of Representatives before being sent to the President for signature. However, as we reported earlier, consideration in the Senate has been postponed due to more pressing issues.
Read more about the initiative's progress:
The CLARITY Act has many opponents. Among them, for example, are Democrats who insist on including expanded ethics provisions in the bill.
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