Before the U.S. Senate conducted a key procedural vote on the CLARITY bill, 18 state attorneys general jointly urged Congress to reject the current version of the bill. The leader of this effort was Letitia James, the Attorney General of New York State. She stated that if the bill is passed in its current form, it may make it easier for crypto scammers to exploit regulatory loopholes.

State-level law enforcement powers become a focal point

These state attorneys general believe that the current wording of the bill may weaken the ability of each state to handle cases of crypto fraud and investor protection. According to them, once some powers are redefined at the federal level, the space for state governments in registration, investigation, and law enforcement may be reduced.

They particularly oppose an arrangement that could expand the powers of the U.S. Securities and Exchange Commission (SEC). The alliance stated that such a move could allow the SEC to override state-level registration requirements in certain situations, thereby altering the existing regulatory division of labor.

The opposition party requests to amend the text of the bill.

There are two main demands in the joint letter: first, to preserve the existing law enforcement powers of each state; second, to further clarify the key provisions in the bill to avoid subsequent legal disputes over regulatory jurisdiction.

In their view, if Congress does not address these issues first, even if the bill moves forward, it may lead to conflicts over jurisdiction between the federal government and state governments during implementation, and it could also affect the efficiency of holding crypto platforms and related projects accountable.

Regulatory disagreements intensify before Senate voting

This public pressure comes on the eve of a procedural vote in the Senate, indicating that the divisions in the United States regarding the regulatory framework for cryptocurrencies continue to widen. Supporters generally hope to unify rules through federal legislation, while opponents worry that state-level law enforcement tools will be weakened.

For the market, the focus of this debate is not only whether the bill can be advanced, but also whether future crypto regulation in the United States will be more centralized at the federal level, or whether state-level law enforcement will continue to play a significant role.