New York Attorney General Letitia James submitted written testimony on 28 July 2026 to the U.S. Senate regarding the Clarity for Payment Stablecoins, Commodities, and Digital Assets Act (the CLARITY Act), the pending federal bill that would create a unified regulatory regime for digital assets. James urged Congress to amend the legislation to preserve state prosecutorial authority over cryptocurrency fraud before any Senate floor vote. As of 28 July 2026, no floor vote has been scheduled.
The CLARITY Act, in its July 2026 form, designates the Commodity Futures Trading Commission as primary federal regulator for most digital assets classified as digital commodities and includes preemption provisions. James's testimony identifies these provisions as overriding state securities, fraud, and consumer protection statutes. She flags the bill's constraints on state attorneys general bringing enforcement actions currently available under state law, including New York's Martin Act, which grants broad securities enforcement authority over digital asset fraud.
Exchanges, custodians, and crypto asset service providers operating in New York would face a changed enforcement environment if the CLARITY Act passes in its current form. The OAG's authority to issue subpoenas and pursue civil fraud actions under New York law could be curtailed by federal preemption. James's testimony notes that cryptocurrency scam complaints to her office have tripled over three years and that reported losses from crypto scams in New York over five years total close to half a billion dollars.
James's testimony does not oppose federal crypto regulation. It calls for an amendment expressly preserving concurrent state jurisdiction and ensuring that state attorneys general retain authority to prosecute fraud regardless of federal asset classification decisions. Several other state attorneys general have raised similar concerns about the preemption provisions. The bill's passage timeline remains open; the Senate has not announced a floor vote date.
Licentium advises digital asset businesses on U.S. federal and state regulatory compliance, and can refer matters to specialist counsel for multi-jurisdictional licensing and enforcement response. Work we undertake includes digital asset regulatory mapping, exchange licensing assessment, state attorney general enforcement response, and CFTC compliance review.