James Warns Federal Bill Could Weaken State Enforcement of Crypto Scams
New York Attorney General Letitia James urged Congress to strengthen cryptocurrency regulation in response to rising scam losses and federal oversight. According to the FBI, Americans reported over $11 billion in crypto-related losses in 2025.
James testified before the Senate that the pending CLARITY Act would weaken state enforcement against digital asset scams by transferring primary oversight to the Commodity Futures Trading Commission (CFTC).
The New York AG argued that this would make it harder for states to investigate fraud and hold cryptocurrency businesses accountable, pointing to complaints submitted to her office about cryptocurrency scams nearly tripling over the past three years.
James recommended requiring 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.