State AGs Slam Clarity Act Over SEC Preemption Concerns
A bipartisan coalition of state attorneys general has voiced its opposition to the Digital Asset Market Clarity Act, arguing that it would strip states of their authority to police cryptocurrency fraud. The coalition, led by New York Attorney General Letitia James, warned that the bill's grant of authority to the Securities and Exchange Commission (SEC) would hand the agency sweeping power to preempt state registration authorities.
The attorneys general pointed out that the bill would prevent states from serving as the first line of defense against what they called an escalating epidemic of cryptocurrency fraud. They cited data showing $11.4 billion in losses from cryptocurrency-related complaints in 2025, a 22% increase from the prior year, with an average reported loss of $62,604.
The coalition argued that state enforcement powers have been a critical weapon in fighting the crypto fraud epidemic and should not be ceded to Washington. They urged Congress not to pass the Clarity Act.