17 State Attorneys General Target the Clarity Act in New Letter

Seventeen state attorneys general and the District of Columbia have written a joint letter to Senate leaders expressing serious concerns about the latest version of the Clarity Act. The letter argues that the current draft leaves too many legal ambiguities regarding consumer protection and fraud enforcement, potentially tying the hands of state regulators.

The updated bill, released by Senator Cynthia Lummis, includes a ban preventing federal officials and judges from issuing or holding major financial interests in digital assets. This specific provision touches on the TRUMP memecoin, though reports indicate the language had backing from the White House. The legislation itself aims to place most digital assets under the oversight of the Commodity Futures Trading Commission rather than the Securities and Exchange Commission.

Traditional financial institutions have also voiced worries that the bill could threaten banking stability by pulling deposits into stablecoins. Despite the mounting pushback from both state officials and traditional banking groups, a crucial procedural vote is set for Tuesday in the Senate. Prediction markets show confidence has ticked up slightly to twenty six percent, keeping traders watching closely to see if the bill clears its first major hurdle.