New York Attorney General Letitia James brought together a bipartisan group of 17 other state attorneys general on Sept. 14 to ask Congress to reject the Digital Asset Market Clarity Act.
Warning to Senate banking leaders
The coalition’s letter went to Sens. Tim Scott and Elizabeth Warren, the chair and ranking member of the Senate Committee on Banking, Housing, and Urban Affairs.
Their argument is that the bill, as written, would keep states from serving as the first line of defense against crypto fraud.
James said in a statement:
“As written, the Clarity Act would embolden scammers and potentially strip attorneys general of our authority to protect our states’ investors and their wallets.”
A record of state enforcement
States have brought more than 330 anti-fraud enforcement actions against scammers in the crypto ecosystem since 2017.
The FBI logged $11.4 billion in losses from cryptocurrency-related complaints in 2025, up 22 percent from 2024, with an average reported loss of $62,604.
The Federal Trade Commission counted another $1.78 billion, a 25.6 percent jump.
In New York, crypto scam complaints to the attorney general’s office have tripled over three years, with reported losses of nearly half a billion dollars over the past five.
Fears of SEC preemption
Beyond enforcement, the letter objects to language allowing the Securities and Exchange Commission to preempt state registration authorities.
The attorneys general call that an unprecedented grant of discretion that could let the agency reset the scope of federal preemption on its own and upend the state securities regime.
Vote set for Tuesday
The bill cleared the Senate Banking Committee in May 2026 by a 15-9 vote.
Sen. Cynthia Lummis said Monday that the final text reflects a year of daily negotiations and incorporates more than 120 Democratic requests, including ethics limits accepted by President Donald Trump.
Republicans need at least seven Democrats to reach the 60 votes required in Tuesday’s procedural vote.
Joining James were the attorneys general of Arizona, California, Connecticut, Delaware, Illinois, Kansas, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, Ohio, Virginia, Washington, Wisconsin, and the District of Columbia.
