New York Attorney General Letitia James warns that proposed federal legislation known as the “Clarity Act” could limit state authorities’ ability to enforce crypto-related laws. Speaking as pressure mounts in Congress over the bill, James argues that a federal market-structure framework would constrain how state regulators pursue cases involving digital-asset fraud and other misconduct. In her comments reported by multiple outlets, she says the legislation could “dilute” or otherwise weaken the states’ role in policing the industry. James also calls on Congress to focus on strengthening consumer protections for people using digital asset platforms. Instead of reducing state oversight, she urges lawmakers to include provisions that better protect consumers while addressing the regulatory gaps she believes persist in the current approach. The warnings come as the debate over how U.S. federal rules should govern crypto markets continues, with states seeking to maintain enforcement tools they say have been important for oversight and deterrence.