On September 14 local time, New York Attorney General Letitia James released a joint letter opposing the Digital Asset Market Clarity Act, or CLARITY Act, and calling for states to retain their authority to combat crypto asset fraud. A total of 18 attorneys general, representing 17 states including New York and Washington, D.C., joined the letter. They asked Senate Banking Committee Chair Tim Scott and Ranking Democrat Elizabeth Warren to oppose the current bill until state authority is adequately preserved. The signatories emphasized that state securities licensing and registration regimes are investor protection tools that support examinations, investigations, and fraud enforcement. Although the bill retains some fraud enforcement powers, they also raised concerns that ambiguous or restrictive wording could lead to jurisdictional disputes and litigation delays.
In particular, they expressed concern that the bill would add a new category of "qualified transaction" to the Securities Act of 1933 that would be exempt from state registration requirements and allow the U.S. Securities and Exchange Commission, or SEC, to define its scope broadly. They argued that the effects could extend beyond crypto assets to state oversight of traditional securities markets. They therefore called for preserving state enforcement authority over securities regardless of whether they are tokenized, maintaining federal-state cooperation, explicitly recognizing the states' role in crypto asset oversight in the law, preserving platform registration regimes, and clarifying ambiguous language. According to The Block, an amendment released on September 13 included a provision allowing state attorneys general to participate in enforcing crypto asset conflict-of-interest rules for public officials. The Senate is scheduled to hold a procedural vote on September 15 to decide whether to advance consideration of the bill, The Block reported.