Attorney General Ellison calls on Congress to preserve states’ ability to protect Americans from cryptocurrency scams
Clarity Act would jeopardize state attorneys’ general ability to protect investors from crypto scams and frauds
Minnesotans have lost $10 million in crypto scams in last 18 months, including $1 million at cryptocurrency kiosks
September 14, 2026 (SAINT PAUL) — Minnesota Attorney General Ellison today joined a bipartisan coalition of 16 attorneys general in opposing the Digital Asset Market Clarity Act (Clarity Act). In a letter to Senators Tim Scott and Elizabeth Warren, Chair and Ranking Member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, Attorney General Ellison and the coalition warn that the Clarity Act would jeopardize their ability to protect investors from rampant digital cryptocurrency fraud and scams. The attorneys general caution that as written, the Clarity Act would prevent states from serving as the first line of defense against the escalating epidemic of cryptocurrency fraud.
“As technology develops, scammers develop new ways to use it in their schemes to steal from Minnesotans,” said Attorney General Ellison. “Cryptocurrency is their latest tool, and we need policies that let states protect people — not open the floodgates to more scams. Cryptocurrency transactions can be immediate, irreversible, and difficult to trace, making them a perfect means for scammers to go after our pocketbooks. In Minnesota, our authority to go after crypto scammers — or to hold cryptocurrency platforms accountable for their roles in these scams — helps keep people safe. The Clarity Act would put Minnesota and other states at risk of losing that authority.”
The Federal Bureau of Investigation (FBI) reported $11.4 billion in losses from complaints involving cryptocurrencies in 2025, an increase of 22% from 2024, with an average reported loss of $62,604. The Federal Trade Commission (FTC) has reported $1.78 billion in losses from complaints involving cryptocurrencies in 2025, a 25.6 percent increase from 2024.
Since Attorney General Ellison took office in 2019, the Consumer Action Division of the Minnesota Attorney General’s Office has received hundreds of complaints of crypto-based scams. In the last 18 months, Minnesotans’ losses from scams paid in cryptocurrency are over $10 million — more than half of all scam losses reported to the office over that time period.
The financial impact of crypto scams on victims can be devastating. In its present form, the Clarity Act would muddy the waters, making it harder for the attorneys general nationwide to continue efforts to crack down on cryptocurrency scams and hold platforms that violate the law accountable. The Clarity Act would also allow the Securities and Exchange Commission (SEC) to preempt state registration authorities. This unprecedented grant of authority would not only apply to digital assets but would also broadly grant unilateral discretion to the SEC to reset the scope of federal preemption, potentially upending the state securities regulatory regime. The attorneys general assert that Congress should not cede such significant power to the SEC.
State enforcement powers have been a critical weapon in fighting the crypto fraud epidemic. Since 2017, states have brought over 330 anti-fraud enforcement actions against scammers in the crypto ecosystem, shutting down fraudulent websites and schemes, securing justice for victims, and prioritizing cases where victims had no federal or private recourse.
On August 1, a new Minnesota law went into effect banning cryptocurrency kiosks across the state. These kiosks allow for a quick, irreversible conversion of cash into digital currency, and have become a common tool for scammers. From 2023 to 2025, Minnesota saw 134 complaints on scams connected to cryptocurrency kiosks, with reported losses reaching nearly $1 million.
Maintaining state oversight of the cryptocurrency industry is critical to protecting consumers and investors. In their letter, the attorneys general advocate for legislation that would:
- Preserve states’ enforcement role for both tokenized and non-tokenized securities;
- Preserve cooperation between the federal government and the states;
- Codify states’ role as regulators of cryptocurrencies and preserve their registration regimes that require crypto platforms to certify with states; and
- Clarify ambiguous language that could otherwise embolden bad actors and lead to legal battles over enforcement.
Joining Attorney General Ellison in the letter to Congress are the attorneys general of Arizona, Connecticut, Delaware, the District of Columbia, Illinois, Kansas, Maryland, Michigan, New Jersey, New York, Nevada, Ohio, Virginia, Washington, and Wisconsin.
