The CLARITY Act could undermine state powers in overseeing the cryptocurrency market and investigating fraud by shifting regulatory control to the Commodity Futures Trading Commission (CFTC). This concern was raised by Letitia James, the Attorney General of New York.
James emphasized the need to enhance consumer protections and maintain existing state laws. She believes that cryptocurrency platforms should be mandated to adhere to anti-money laundering (AML) and know your customer (KYC) requirements, as well as cybersecurity measures, while also monitoring for suspicious activities and market manipulation.