Eighteen state attorneys general have written to the Senate Banking Committee urging senators to vote against the Clarity Act in its current form, a day before the bill faces a procedural vote that will decide whether it reaches the Senate floor.
The letter, sent on 14 September to committee chairman Tim Scott and ranking member Elizabeth Warren, is signed by the attorneys general of New York, Arizona, California, Connecticut, Delaware, Illinois, Kansas, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, Ohio, Virginia, Washington, Wisconsin and the District of Columbia.
Its ask is explicit. The Senate ‘should vote NO on the current version of the CLARITY Act unless and until the states’ powers to police the market and protect investors are fully preserved.’
What They Say the Bill Does
The coalition’s objection is not to federal crypto rules. It is to what they argue the bill would take away from the states.
‘While the current draft of the CLARITY Act reserves certain powers for states to prosecute fraud, the language is often ambiguous, unclear, or confined in ways that either create the opportunity to challenge state police powers or outright deprive the states of their ability to continue to combat the scam epidemic,’ the letter says.
The sharpest line in it concerns not outright preemption but uncertainty. ‘Even though states will prevail in enforcing laws that are not preempted, the benefit of litigation and delay caused by ambiguity accrues to bad actors.’ In other words, a scammer does not need to win the argument about who has jurisdiction. They only need the argument to take time.
The letter sets out four objections: that state enforcement remains essential, that state licensing and registration authority must be preserved, that ambiguities in the text must be resolved, and that the preemption provisions are too broad. On the last point it names a mechanism, arguing the draft would hand the Securities and Exchange Commission preemption power indirectly through a ‘qualified transaction’ loophole in the Securities Act of 1933.
The Numbers Behind the Argument
The letter grounds its case in figures rather than assertion.
The FBI’s Internet Crime Complaint Center recorded $11.4 billion in losses from complaints involving cryptocurrency in 2025, up 22% on the previous year, with an average reported loss of $62,604. The Federal Trade Commission logged $1.78 billion in crypto-related complaint losses over the same period, a rise of 25.6%. Analytics firm TRM Labs estimated $158 billion in illicit cryptocurrency volume in 2025, close to 145% above 2024.
Against that, the states say they have brought more than 330 anti-fraud enforcement actions in the cryptocurrency sector since 2017, prioritising cases where victims had no federal, private or other route to recovery.
The Concession That Was Meant to Settle This
The letter landed as a separate obstacle appeared to be clearing.
The Associated Press reported on Sunday that President Donald Trump had agreed to about 80% of a proposal from Republican senator Thom Tillis and Democratic senator Ruben Gallego, citing a senior Republican aide. The bill already barred federally elected officials, their spouses and federal judges from issuing digital assets. The revised version would go further, requiring officials with a significant financial interest in a crypto issuer to divest it or place it in a blind trust.
Those provisions address objections raised by Democrats and by Tillis, who had argued earlier drafts did not go far enough on potential conflicts involving the president’s own crypto holdings. CNR reported yesterday that a wallet matching Trump’s disclosed World Liberty Financial founder allocation, worth roughly $800 million, had entered a vesting contract with a first unlock in 2028.
Republicans have described the revised bill as their last, best and final offer to Democrats.
A New Job and an Older One
The compromise also hands state attorneys general something: a role in enforcing the new ethics restrictions on
