New York Attorney General Letitia James has called on Congress to implement federal legislation regulating cryptocurrencies and digital assets. In a letter to congressional leaders, Attorney General James highlighted the absence of strong federal regulations as a contributor to fraud, criminal activity, and financial instability. She emphasized the need for federal oversight to enhance national security, strengthen financial markets, and protect investors from cryptocurrency scams.
Attorney General James stated, "Countless New Yorkers invest in cryptocurrency and digital assets, and more must be done to protect them and their money." This plea comes after the U.S. Department of Justice dismantled federal criminal cryptocurrency fraud enforcement, underscoring the importance of a regulatory framework.
Her letter also mentioned that price manipulation, rigged markets, and fraud are draining billions of dollars from American investors. It highlighted the necessity for federal regulation to strengthen national security, as digital currencies can be used for illicit purposes. Cryptocurrency fraud in the United States cost an estimated $12 billion in 2024 alone.
To address related risks, Attorney General James proposed several requirements: stablecoin issuers should have a U.S. presence, stablecoins must be backed by U.S. dollars or treasuries, and platforms should use anti-money laundering measures. Additionally, regulations should ensure accountability from issuers, prevent conflicts of interest, promote price transparency, identify and prevent fraud, and disallow digital assets in retirement accounts.
Attorney General James has been proactive in holding cryptocurrency companies accountable. In the past years, she has secured significant settlements from firms like Genesis Global Capital and KuCoin for violating regulations. Her ongoing efforts also include actions against NovaTechFx and other entities for fraudulent schemes targeting investors.