Crypto
18 Attorneys General Asked the Senate to Keep Their Handcuffs: the States Remain Crypto's Real Cops
A bipartisan group of 18 attorneys general from the states and the District of Columbia called on the U.S. Senate on Monday to protect the states' power to police crypto, urging lawmakers to vote against the Digital Asset Market Clarity Act in its current form. The letter went to Senate Banking Committee Chair Tim Scott and ranking member Elizabeth Warren a day before the bill's procedural vote. CoinDesk reported the letter on September 14.
The coalition's concern centers on language. Recent drafts of the Clarity Act reserve certain powers for states to prosecute fraud, but the attorneys general called that language ambiguous, saying it could let defendants challenge state enforcement actions. The letter also argued that the bill would let the SEC preempt state registration authorities through its 'qualified transaction' definition, potentially upending the state securities regulatory regime.
The signers span the political map, with New York's Letitia James and California's Rob Bonta alongside Kansas's Kris Kobach and Ohio's Andy Wilson. Their argument draws on the record: the FBI found that $11.4 billion was stolen from investors last year through crypto, and the letter presents state enforcement as an essential complement to federal authority in going after the scammers behind those losses.
The latest draft of the bill did give state attorneys general one new role: enforcing conflict of interest rules for public officials. That provision became a sticking point among Democrats given President Donald Trump's crypto wealth, which has grown to hundreds of millions of dollars linked to World Liberty Financial and his TRUMP memecoin. Earlier versions would have put the federal Justice Department in charge of that enforcement.
Other groups joined the attorneys general in raising objections. The Indian Gaming Association said the bill represented 'the largest expansion of CFTC authority since the 2010 Dodd-Frank bill' and raised concerns about preemption of state and tribal gaming laws, urging that contracts on sports betting or casino games stay off designated contract markets.
For crypto investors, the letter is a reminder of where much of the actual consumer protection already lives. While Washington debates market structure, the states have been the cops on the beat, bringing the cases and recovering the funds. Whatever form the federal framework eventually takes, the attorneys general have made clear they intend to keep their handcuffs, and the investors they protect are better for the fight.
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