NASAA Highlights Concerns About Digital Commodity Intermediaries Act

In a formal letter to Senate leaders, the North American Securities Administrators Association, or NASAA, expressed significant concerns regarding the Digital Commodity Intermediaries Act, or DCIA. While supporting the goal of responsible innovation, Marni Rock Gibson, president of NASAA, stated that the organization cannot support the bill in its current form due to provisions that may inadvertently strip state regulators of their ability to fight fraud.

NASAA is urging Congress to make three targeted changes to the legislation to ensure that Main Street investors remain protected.

NASAA’s primary concern is that the current drafting of the DCIA creates ambiguity regarding where federal jurisdiction ends and state authority begins. The organization has proposed the following amendments:

• Explicit state authority: Clarify that states retain the power to investigate and bring administrative, civil, and criminal enforcement actions involving fraud or deceit.
• Business conduct standards: Ensure states can still combat “dishonest or unethical” conduct, which NASAA argues is a long-standing pillar of state enforcement.
• Definition alignment: Address inconsistencies in how digital assets are defined. NASAA noted that the DCIA’s current language conflicts with the CLARITY Act, creating a confusing framework where some tokens are simultaneously labeled as non-securities and covered securities.

To emphasize the importance of state-level oversight, NASAA cited the regulatory failures of the 1970s. During that period, federal preemption of state authority led to a surge in boiler room scams: “Illegitimate commodities markets quickly expanded, with boiler rooms selling speculative contracts tied to assets that often did not exist.”

A prominent example cited was the International Gold Bullion Exchange, which defrauded over 425,000 investors of more than $140 million before it was discovered that their gold holdings were actually painted wood.

NASAA argues that the most effective way to provide market clarity is to treat digital assets as federally covered securities while enacting a savings clause that explicitly preserves state anti-fraud authorities. This would mirror the successful model established by the National Securities Markets Improvement Act of 1996.

The letter concludes by stating that NASAA remains ready to work with the Senate Committee on Agriculture, Nutrition, and Forestry and all of Congress to promote innovation while preserving state anti-fraud authorities in a new market structure for digital commodities.

Last fall, NASAA similarly emphasized its support for preserving state rights in the securities markets, warning Congress alongside the Public Investors Advocate Bar Association, or PIABA,  that parts of the Responsible Financial Innovation Act of 2025, or RFIA, would significantly undermine state regulators’ ability to fight fraud.

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