New York Attorney General Letitia James is amplifying calls for comprehensive federal legislation governing the cryptocurrency sector.
In a formal communication dated Thursday, April 10, James highlighted the significant risks posed by the current lack of a unified federal regulatory approach for digital assets. She cautioned that this void increases vulnerabilities to fraud, illicit activities, and potential financial instability, demanding immediate attention to safeguard market integrity.
A robust legal framework at the federal level is essential to minimize these risks and bolster investor protections, James argued. The letter was directed to key congressional figures, including Senate Majority Leader John Thune, Senate Minority Leader Charles Schumer, House Speaker Mike Johnson, and House Minority Leader Hakeem Jeffries.
The Attorney General stressed the substantial presence of cryptocurrency and digital asset investors within New York, underscoring the responsibility of lawmakers to enhance protections for individuals and their investments.
“Millions of dollars have been lost by investors in New York and nationwide due to cryptocurrency scams and fraud—losses that could be averted with stronger federal oversight,” James stated. “I am urging Congress to enact legislation that fortifies federal regulations on the crypto industry, aiming to protect investors, stabilize financial markets, and combat fraudulent activities.”
James proposed specific measures, including mandatory registration of crypto companies with a federal agency and the establishment of minimum listing standards for crypto tokens. This push for regulatory clarity aligns with broader industry discussions, such as the ongoing debate around SEC rules for NFT marketplaces.
This appeal arrives shortly after reports of the Department of Justice reorganizing its crypto enforcement efforts and amidst legislative movement in Congress concerning stablecoin regulation. The need for clear guidelines is becoming increasingly apparent as the crypto industry seeks clarity from the SEC.
Addressing stablecoins specifically, James advocated for a federal framework requiring issuers, such as those behind major tokens like Tether (USDT) and Circle’s USDC (USDC), to maintain a physical presence in the United States. Furthermore, she proposed that their reserves, typically U.S. Treasuries and cash equivalents, be held in domestic banking institutions.