- A bipartisan group of attorneys general urged the Senate to reject the bill without changes.
- The letter said the Clarity Act could weaken state authority over crypto-related fraud cases.
- Banks and other groups also raised objections ahead of the Senate vote.
A new dispute over the Clarity Act is building as the U.S. Senate prepares to consider the crypto market structure bill. A bipartisan coalition of state attorneys general said lawmakers should not pass the measure without revisions that clearly preserve state enforcement powers. Their concerns center on whether the Clarity Act could make it harder for states to bring securities and commodities cases tied to online scams. The debate widened further as other critics, including the Indian Gaming Association and banking representatives, also challenged parts of the latest draft. The pushback comes as supporters of the legislation continue discussions around its language and scope.
Clarity Act draws objections from state attorneys general
A bipartisan group of attorneys general sent a letter Monday calling on the Senate to protect states’ ability to police crypto under the Digital Asset Market Clarity Act. The state officials urged lawmakers to vote no on the bill unless changes are made. According to the report, the letter was signed by 18 attorneys general from states and the District of Columbia.
The letter argued that, if enacted in its current form, the bill could restrict states from filing lawsuits against online scams using their existing securities and commodities powers. The attorneys general wrote that states must remain equipped to protect people from predatory scammers and said they oppose federal statutory changes that could displace state oversight of securities and commodities markets.
Why states say the Clarity Act language is unclear
The attorneys general said recent drafts of the Clarity Act do reserve certain powers for states to prosecute fraud, but they described the wording as ambiguous and vague. In their view, that ambiguity could give defendants an opening to block state enforcement actions in court, even where states believe they have authority under existing law.
The letter also said the bill would allow the U.S. Securities and Exchange Commission to preempt state authority through the definition of a “qualified transaction.” To support the urgency of their concerns, the letter cited an FBI finding that $11.4 billion had been stolen from investors last year through crypto.
Broader Clarity Act opposition expands before vote
The signers included lead prosecutors from New York, Arizona, Connecticut, California, Kansas, Ohio and other states. The report said the group reflected both parties, naming Republicans Kris Kobach and Andy Wilson alongside Democrats Letitia James and Rob Bonta. That bipartisan mix was presented as evidence of how widely the concerns are shared.
Other organizations have also opposed the latest draft. The Indian Gaming Association said it was concerned about what it described as the largest expansion of Commodity Futures Trading Commission authority since the 2010 Dodd-Frank bill. In a statement, IGA Chair David Bean said the group would continue urging members to vote against the bill unless the text clearly protects state and tribal gaming laws and the Indian Gaming Regulatory Act from federal preemption.
Stablecoin rewards remain another flashpoint
The Clarity Act is also facing criticism over its treatment of stablecoin yield and rewards. Christopher Williston, president and CEO of the Independent Bankers Association of Texas, reacted sharply to revised yield text published Monday. In a post on X, he called the new language “a joke” and said it was “a meaningless nothing.”
Senator Cynthia Lummis, one of the bill’s chief sponsors, also appeared in the debate over outside criticism. She said in a post on X that she met with David Bean in June and that he had not expressed opposition to the language at that time. That exchange added another layer to the already active fight around the bill before the Senate vote.
Conclusion
The Clarity Act is drawing resistance from multiple directions as the Senate approaches a vote. State attorneys general said the bill should be rejected unless it is revised to clearly preserve their power to pursue crypto-related securities and commodities cases tied to online scams. Their letter warned that vague language and the bill’s qualified transaction framework could limit state enforcement. At the same time, the Indian Gaming Association objected to possible federal preemption and expanded CFTC authority, while banking representatives criticized the latest stablecoin rewards language. Together, those disputes show the Clarity Act remains contested even as supporters continue to advance it.
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