New York Attorney General Letitia James and 17 other attorneys general are urging Congress not to pass the Digital Asset Market Clarity Act as written, arguing that it could weaken state enforcement against cryptocurrency fraud.
The bipartisan coalition sent a letter to Sens. Tim Scott and Elizabeth Warren, the chair and ranking member of the Senate Banking, Housing and Urban Affairs Committee. The measure is before Congress; the attorneys general's warning concerns what they say it would do if enacted, not a change already in force.
Why the states object
James said the bill could reduce state attorneys general's authority to pursue scams and protect investors. The coalition argues that state regulators often act before federal authorities or private plaintiffs and that unclear language in the measure could invite disputes over who may enforce securities laws involving digital assets.
The letter also objects to a provision the coalition says would let the Securities and Exchange Commission preempt state registration authority. According to the attorneys general, that power could reach beyond digital assets and affect the broader state securities regulatory system. The release describes the coalition's interpretation of the bill; it does not provide a response from the bill's sponsors or the SEC.
The coalition wants Congress to preserve state enforcement for tokenized and traditional securities, maintain federal-state cooperation, protect state registration requirements for crypto platforms and clarify language it considers ambiguous. Its request is for changes to the legislation as well as a rejection of the current draft.
Complaints and enforcement
The New York attorney general's office said complaints it receives about crypto scams have tripled over three years and that reported losses to its office totaled nearly $500 million over five years. Those are reports to the state office, not a count of all cryptocurrency losses in New York.
The office cited FBI data showing $11.4 billion in losses in 2025 complaints involving cryptocurrencies, up 22% from 2024, with an average reported loss of $62,604. It separately cited Federal Trade Commission reports of $1.78 billion in 2025 losses, up 25.6%. The two agencies' complaint figures are separate measures and should not be added together as a single national total.
States have brought more than 330 anti-fraud actions involving the crypto ecosystem since 2017, the coalition said. James's office pointed to its 2019 action against stablecoin issuer Tether, refunds and fines involving Coin Café, Gemini, Genesis and KuCoin, and work with federal authorities in GTV, Nexo and BlockFi cases as examples of state and federal enforcement.
The office also cited a 2026 recovery of more than $5 million from Uphold, a 2025 $200 million settlement of its claims involving Galaxy Digital and a 2024 lawsuit alleging a NovaTechFx pyramid scheme that affected more than 11,000 New Yorkers. A settlement or allegation in those examples should not be read as a finding about any other platform.
Along with New York, the letter was signed by attorneys general from 16 states and the District of Columbia. Congress has not yet acted on the coalition's request in the material released by James's office.
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