17 State Attorneys General Urge Senate to Reject Clarity Act Over Crypto Enforcement Concerns

A bipartisan group of state attorneys general has asked the U.S. Senate to vote down the Digital Asset Market Clarity Act unless changes are made, warning that the bill could limit their power to pursue crypto-related fraud cases.

In a letter sent Monday and signed by attorneys general from 17 states plus the District of Columbia, the officials said the current draft of the bill puts states’ securities and commodities enforcement authority at risk. They argued that if scammers can use the law to block state level lawsuits, victims of online fraud will have fewer places to turn for justice. The letter pointed to FBI data showing $11.4 billion was stolen from crypto investors last year alone.

Vague Language Raises Legal Concerns

According to the letter, the bill’s wording around preserving state powers is unclear and could be used by defendants to challenge state enforcement actions in court. It also flagged that the SEC could use the bill’s “qualified transaction” definition to override state authority altogether.

Bipartisan Support Signals Wider Concern

The letter carries signatures from both Republican and Democratic attorneys general, including officials from New York, Arizona, California, Kansas, Ohio, and Connecticut, showing the issue crosses party lines.

The Indian Gaming Association also raised objections, citing concerns about expanded federal commodities oversight affecting tribal gaming rights. Meanwhile, banking groups have criticized separate stablecoin yield provisions in the bill as unclear and ineffective.