New York Attorney General Letitia James led a bipartisan coalition of 18 attorneys general on September 14, 2026, in opposing the Digital Asset Market Clarity Act. In a letter to Senators Tim Scott and Elizabeth Warren, the coalition warned that the bill as written could impair states’ ability to protect investors from cryptocurrency fraud and allow the Securities and Exchange Commission to preempt state registration authorities.
Scott and Warren are the chair and ranking member, respectively, of the U.S. Senate Committee on Banking, Housing, and Urban Affairs. The attorneys general contend that the legislation could restrict states’ role as the first line of defense against cryptocurrency scams and create legal uncertainty over enforcement. They also object to what they describe as an unprecedented grant of unilateral discretion to the SEC to reset the scope of federal preemption, potentially affecting the broader state securities regulatory system as well as digital assets.
The coalition cited rising reported losses involving cryptocurrencies. The Federal Bureau of Investigation reported $11.4 billion in losses from cryptocurrency-related complaints in 2025, up 22 percent from 2024, with an average reported loss of $62,604. The Federal Trade Commission reported $1.78 billion in such losses in 2025, a 25.6 percent increase from the previous year. In New York, cryptocurrency scam complaints to the Office of the New York Attorney General tripled over three years, while reported losses totaled nearly half a billion dollars over five years.
State authorities have brought more than 330 anti-fraud enforcement actions involving the cryptocurrency ecosystem since 2017, according to the attorney general’s office. New York’s office said it has secured billions of dollars in refunds and fines from cryptocurrency brokers, including Coin Café, Gemini, Genesis and KuCoin, and has worked with federal authorities in matters involving GTV, Nexo and Blockfi. Its earlier cases also included actions involving Tether, Uphold, Galaxy Digital and NovaTechFx.
The attorneys general asked Congress to revise digital-asset legislation in four areas:
- Preserve state enforcement for tokenized and non-tokenized securities
- Maintain cooperation between federal and state authorities
- Codify states’ cryptocurrency regulatory role and registration regimes
- Clarify ambiguous language that could prompt misconduct or enforcement litigation
The letter was joined by the attorneys general of Arizona, California, Connecticut, Delaware, Illinois, Kansas, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, Ohio, Virginia, Washington, Wisconsin and the District of Columbia. James said Congress should not pass the Clarity Act in its present form because, in the coalition’s view, it could strip attorneys general of authority to protect investors and hold platforms accountable under state law.