New York Attorney General Letitia James led a coalition of 18 attorneys general Monday, urging Congress to reject the CLARITY Act, which would “embolden scammers.”
What the AGs Are Arguing
In a letter to Senate Banking Committee Chair Sen. Tim Scott (R-SC) and Ranking Member Sen. Elizabeth Warren (D-Mass.), James and 17 fellow attorneys general argued the CLARITY Act would gut state enforcement powers at a time when crypto fraud is accelerating.
The FBI reported $11.4 billion in crypto-related losses in 2025, up 22% from the prior year.
Meanwhile, the FTC logged $1.78 billion in crypto fraud losses over the same period, up 25.6%.
In New York alone, crypto scam complaints tripled over the last three years with losses totaling nearly half a billion dollars over five years.
“As written, the Clarity Act would embolden scammers and potentially strip attorneys general of our authority to protect our states’ investors and their wallets,” James said.
The coalition also warned the bill would give the SEC unprecedented authority to preempt state securities registration regimes, a power they argue Congress should not hand over.
Joining James are 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.
What Lummis Says in Response
Sen. Cynthia Lummis (R-Wyo.) published an op-ed in The Hill Monday pushing back directly, calling the CLARITY Act the one shot Congress has to pass meaningful crypto market structure legislation.
She argued the bill already contains more than 20 new sections on illicit finance, including sanctions compliance for DeFi platforms, new authority to cut off money laundering through offshore exchanges, and $150 million in new FinCEN funding.
On ethics, Lummis wrote that Trump agreed to a first-of-its-kind ban preventing the president, vice president, all members of Congress, and federal judges from issuing or sponsoring digital assets for profit.
“If my Democratic colleagues are truly concerned about the president’s crypto investments, then passing this bill — not blocking it — is the way to address that,” she wrote.
Her warning on failure was direct: if the bill dies, crypto companies move to London, Singapore, or Abu Dhabi, taking American jobs, tax revenue, and regulatory jurisdiction with them.
Image: Shutterstock
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