Bipartisan group of attorneys general pen letter opposing ‘ambiguous’ Clarity Act

A bipartisan group of attorneys general sent a letter Monday to Sen. Tim Scott (R-SC), chairman of the Senate banking committee, and ranking member Sen. Elizabeth Warren (D-MA), raising concerns about the “ambiguities” in the Digital Asset Market Clarity Act.The Senate is scheduled to vote on the Clarity Act on Tuesday, which would establish a national regulatory framework for cryptocurrencies by dividing the Commodity Futures Trading Commission and Securities and Exchange Commission oversight. The final text of the legislation was released in the final hours of the weekend, after significant changes were made at the request of Democrats.In a letter spearheaded by New York Attorney General Letitia James, the group of 18 attorneys general raised concerns that the bill strips regulatory power from states, according to the letter obtained by Punchbowl News. Kansas Attorney General Kris Kobach and Ohio Attorney General Andy Wilson were the only Republicans to sign on to the letter. “As the epidemic of online scams continues to grow, we remain firmly opposed to any federal statutory changes that would displace states’ authority to oversee the securities and commodities markets to protect everyday Americans,” they wrote. “Enforcing our laws against those defrauding investors in our states is an important function and an essential complement to federal authority.”The letter notes that while the current draft of the Clarity Act includes a “meaningful role” for state attorneys general to sue if federal officials break the law, the language does not establish clear guidelines that preserve state investigative authority.“We remain deeply concerned about confusing and conflicting text in multiple sections of the bill that are vulnerable to exploitation by bad actors who may seize upon that text to try to weaken existing state anti-fraud, investigative, and enforcement authority, including administrative, civil, and criminal powers that form the basis of state police powers, ” the letter said. “State securities and commodities regulators are often first responders to investment fraud and frequently are the only regulators positioned to deliver accountability and recovery for constituents.”Additionally, the top lawyers said the bill contains language that grants the CFTC and SEC superseding control of states’ traditional enforcement powers to move quickly against crypto scams.OBAMA URGES DEMOCRATS TO PRIORITIZE AI OVERSIGHT, WARNS TECH COULD BE ‘DANGEROUS’“Giving any federal agency such broad preemptive power would mark a significant departure from the current system of cooperative federalism,” the letter said.The Clarity Act passed the House in 2025 with bipartisan support, but the Senate has spent months working on its own version of the legislation as lawmakers seek to resolve longstanding uncertainty about how digital assets should be regulated.