$11 Billion Crypto Losses Prompt NY AG Letitia James to Seek Tougher Rules

New York Attorney General Letitia James is calling on Congress to strengthen cryptocurrency regulation in response to rising scam losses. The FBI reported that Americans submitted complaints involving cryptocurrency, totaling more than $11 billion in losses.

James argued that the CLARITY Act would weaken state enforcement against digital asset scams by transferring primary oversight to the Commodity Futures Trading Commission (CFTC). This, she claims, would make it harder for states to investigate fraud and hold cryptocurrency businesses accountable.

The attorney general 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. She also recommended restricting cryptocurrency transactions that cannot be fully traced from conversion into U.S. dollars.

James highlighted several enforcement actions supporting her argument, including settlements involving Tether, Coin Café, Gemini, Genesis, Kucoin, and a recent agreement requiring Uphold to pay more than $5 million over its promotion of the CredEarn investment program.