New York Attorney General Letitia James urged Congress to strengthen cryptocurrency regulation as the FBI reported more than $11 billion in crypto-related losses. Her Senate testimony argued the pending CLARITY Act would weaken state enforcement against digital asset scams.
Key Takeaways
New York AG warns the CLARITY Act could limit state fraud enforcement.FBI reports $11 billion in crypto losses as Letitia James calls for tougher rules.Proposal calls for stronger AML, KYC, and platform accountability.“Without adequate laws and regulations, financial crises ensue. We urge Congress to safeguard our financial markets and protect America’s investors, their future, our economy, and national security.”
Attorney General James argued that the CLARITY Act would transfer primary oversight of digital assets to the Commodity Futures Trading Commission (CFTC) while overriding important state regulatory authority, making it harder for states to investigate fraud and hold cryptocurrency businesses accountable.
Complaints submitted to James’ office about cryptocurrency scams almost tripled over the past three years, while reported crypto fraud and scam losses approached $500 million over the past five years.
Proposed Rules Target Fraud, Money Laundering, and Platform ResponsibilityAttorney General James urged Congress to require cryptocurrency platforms to comply with anti-money laundering (AML) rules, know-your-customer (KYC) requirements, cybersecurity standards, market surveillance obligations, and financial responsibility for preventable fraud, while preserving existing securities, commodities, and money transmission laws.
She also recommended restricting cryptocurrency transactions that cannot be fully traced from conversion into U.S. dollars and prohibiting elected officials and people who recently served in government from participating in cryptocurrency regulation when financial conflicts may exist.
FBI’s $11 Billion Crypto Loss Figure Adds Pressure for Tougher Rules
