NY AG James Blocks Crypto Bill Over Fear of Losing Local Fraud Enforcement

New York Attorney General Letitia James is leading a bipartisan coalition of 17 other states in opposing the Digital Asset Market Clarity Act, a landmark cryptocurrency bill that's set to be voted on by the Senate.

The unusual twist is that these state prosecutors are willing to give up unprecedented national power over presidential crypto holdings, as granted by the legislation. However, they argue this would lead to a hidden trap: stripping their ability to fight ordinary scammers who drained $11.4 billion from American wallets last year.

James' office claims that since 2017, state enforcers have brought over 330 actions to protect regular families from scams. They point out that the CLARITY Act contains a provision regarding qualified transactions, which gives the Securities and Exchange Commission broad power to override state registration systems, effectively pushing local law enforcement out of commodities fraud cases.

The $11.4 billion in cryptocurrency complaint losses tracked by the FBI in 2025 is an astonishing figure, with an average loss of over $62,000 per victim. The attorneys general believe that accepting national powers would leave consumers caught off guard when crises hit and local prosecutors would lose their ability to police basic scams happening in their own backyards.