New York Attorney General Letitia James, together with 17 other state attorneys general, has sent a letter to the U.S. Senate opposing the CLARITY Act. The group said the bill, in its current form, could weaken state enforcement against cryptocurrency fraud and investor harm, and could remove state attorneys general from their role as the first line of defense in crypto fraud cases.
States warn current bill would weaken enforcement
James said the New York attorney general’s office has pursued misconduct by crypto firms for years. She cited cases involving Coin Cafe, Gemini, Genesis and KuCoin, saying those actions recovered billions of dollars in penalties and refunds.
She warned that if the CLARITY Act limits state regulatory authority, it could leave more room for fraudsters.
Letter cites federal and state fraud figures
According to the figures cited in the report, the FBI said crypto-related fraud complaints in 2025 led to $11.4 billion in losses, up 22% year over year. The Federal Trade Commission, or FTC, put related losses at $1.78 billion, up 25.6%.
The New York attorney general’s office also said crypto fraud complaints it received have risen by about threefold over the past three years, while reported losses over the past five years were close to $500 million.
What the 18 attorneys general want changed
The 18 attorneys general said the CLARITY Act should explicitly preserve state enforcement authority over tokenized and non-tokenized securities. They also said states should remain able to register and regulate crypto platforms, while federal and state regulators should work more closely together.
The group also opposed giving the U.S. Securities and Exchange Commission, or SEC, overly broad preemption over state oversight, saying that could weaken long-standing state securities regulatory systems.