Federal Crypto Bill Could Erode State Oversight

New York Attorney General Letitia James has testified before Congress that proposed federal cryptocurrency legislation could undermine state oversight of digital asset markets.

James argued that the Digital Asset Market Clarity Act would shift responsibility from states to the Commodity Futures Trading Commission, limiting their ability to investigate fraud and protect investors. According to James, complaints about cryptocurrency scams have tripled in the past three years, with reported losses totaling almost US$500 million over the previous five years.

In her testimony, James called for stricter regulations on digital asset platforms, including mandatory anti-money laundering, know-your-customer, and cybersecurity standards. She also urged lawmakers to require companies and intermediaries to compensate customers when they fail to prevent fraud.