State Attorneys General Warn Senate: Change Clarity Act or Face 'Vote No' Threat

A bipartisan group of 18 state attorneys general is urging the U.S. Senate to change the Digital Asset Market Clarity Act, warning that the current bill could weaken states' ability to bring crypto-related securities and commodities enforcement actions.

The officials, representing states including New York, Arizona, Connecticut, California, Kansas, Ohio, and the District of Columbia, said lawmakers should vote against the legislation unless state enforcement powers are expressly protected. They argue that recent versions of the bill preserve certain state fraud powers but do so in language that remains ambiguous enough for defendants to challenge state enforcement cases.

The concern centers partly on the bill's definition of a 'qualified transaction,' which could allow the Securities and Exchange Commission to preempt state authority in cases that would otherwise fall under existing state securities or commodities laws. The attorneys general cited FBI data showing that investors lost $11.4 billion to crypto-related fraud last year, arguing that states should retain their existing ability to pursue scammers as federal lawmakers establish a national digital asset framework.