Maryland Attorney General Joins Coalition Urging Congress to Protect State Authority Over Crypto Scams

Maryland Attorney General Anthony G. Brown has joined a bipartisan group of 14 other state attorneys general in expressing significant concerns about the proposed Digital Asset Market Clarity Act, also known as the Clarity Act. In a formal letter sent to U.S. Senators Tim Scott and Elizabeth Warren, who lead the Senate Committee on Banking, Housing, and Urban Affairs, the coalition argues that the Clarity Act, as currently written, could severely undermine their states’ ability to safeguard citizens from the growing problem of cryptocurrency fraud and scams. The attorneys general are particularly worried that the legislation could hinder their role as the primary line of defense against an escalating wave of digital asset-related illicit activities.

The financial toll of cryptocurrency scams on individuals can be devastating. Federal data highlights the severity of this issue, with the FBI reporting over 11.4 billion in losses from cryptocurrency-related complaints in 2025, marking a 22% increase from the previous year. The average loss per victim during this period was approximately 62,604. Similarly, the Federal Trade Commission (FTC) documented $1.78 billion in losses from cryptocurrency complaints in 2025, a substantial 25.6% increase from 2024. The attorneys general contend that the Clarity Act, in its current form, would create ambiguity, making it more challenging to combat these scams and hold accountable the platforms that violate existing laws. The legislation could also grant the Securities and Exchange Commission (SEC) the authority to take actions that preempt state registration requirements. This expansive delegation of power, which could extend beyond digital assets and allow the SEC broad discretion to reshape federal preemption, is a point of contention for the state officials, who believe such significant authority should not be transferred to the SEC.

The enforcement powers held by state governments have proven to be an essential tool in combating the widespread issue of crypto fraud. Since 2017, states have initiated more than 330 enforcement actions targeting scammers operating within the cryptocurrency space. These actions have been instrumental in dismantling fraudulent websites and schemes, achieving justice for victims, and prioritizing cases where individuals lacked federal or private avenues for recourse. The attorneys general are advocating for legislative changes that would ensure the continued effectiveness of state oversight.

Their proposed legislative framework emphasizes preserving the enforcement role of states for both tokenized and non-tokenized securities, as well as maintaining the collaborative relationship between federal agencies and state governments. Furthermore, they seek to codify the states’ position as regulators of cryptocurrencies, preserving their existing registration regimes that mandate crypto platforms to certify with individual states. The coalition also calls for clarification of any ambiguous language within the proposed act that could potentially empower malicious actors or lead to prolonged legal disputes over enforcement authority. The group of attorneys general joining Maryland’s Attorney General Brown in sending this letter includes their counterparts from Arizona, Connecticut, Delaware, the District of Columbia, Illinois, Kansas, Michigan, Minnesota, New Jersey, New York, Nevada, Ohio, Virginia, Washington, and Wisconsin.

Article by Mel Anara, based upon information from the Maryland Attorney General’s Office.

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