New York Attorney General Urges Congress to Tighten Crypto Oversight

New York Attorney General Letitia James urged Congress to strengthen oversight of cryptocurrency companies, warning that proposed federal legislation could limit states’ ability to investigate scams and hold platforms accountable. In written testimony submitted Monday to the Senate Permanent Subcommittee on Investigations, James argued that the Digital Asset Market Clarity Act would replace state oversight of digital asset markets with regulation by the Commodity Futures Trading Commission, weakening state and local enforcement in the process. According to Cointelegraph, James said complaints about crypto scams received by her office have tripled over the past three years, while reported losses totaled nearly $500 million over five years. She said the growth in complaints and losses shows the need for stronger protections and broader accountability across the crypto industry.

James called on crypto platforms to comply with anti-money laundering, know-your-customer, and cybersecurity requirements, and to monitor for suspicious activity and market manipulation. She also urged Congress to make platforms and intermediaries financially liable when they fail to protect customers from fraud. In addition, James asked lawmakers to prohibit the conversion of mixer-linked or otherwise untraceable crypto into US dollars and to preserve existing state money transmission, commodities and securities laws. She further proposed barring elected officials and recent government officials from regulating crypto when they may have financial interests in the industry. Her testimony framed these measures as necessary to prevent scams, maintain enforcement authority, and ensure that digital asset firms remain subject to legal and compliance standards already applied in other parts of the financial system.