Ahead of Crypto Bill Vote, Galvin Urges Senate Banking Committee to Retain State Investor Protections

With a U.S. Senate committee planning to consider the crypto regulation bill known as the Digital Asset Market Clarity Act today, Secretary of the Commonwealth William F. Galvin is calling on the committee to reject the bill as it is currently written.

Galvin, the chief securities regular for Massachusetts, is urging the committee to amend the bill to enable his office to continue to protect investors from bad actors and intermediaries dealing in tokenized securities. He has worked with Senator Elizabeth Warren, the ranking member on the Senate's Committee on Banking, Housing, and Urban Affairs, to offer what he calls two "commonsense amendments."

Galvin’s proposed amendments seek to retain a state’s ability to enforce its own laws to protect investors and continue to regulate the riskiest corners of traditional securities markets.

"The Clarity Act, as it is currently written, provides a backdoor to special interests far beyond crypto, deregulating penny stocks and other high-risk securities," Galvin said today.

In a letter sent Tuesday to the committee, Galvin warned that the Clarity Act "will erode traditional state securities authority to the detriment of investors."

"I have consistently called for legislation that protects investors and savers by preserving (1) state authority to pursue fraud, manipulation, and deceptive practices and (2) traditional securities principles. The Clarity Act fails to address these fundamental concerns," Galvin wrote.