NY AG Warns Federal Crypto Bill Could Undermine State Oversight

New York Attorney General Letitia James has expressed concerns that proposed federal cryptocurrency legislation could weaken state oversight. In testimony submitted to a Senate investigative panel, she argued that the Digital Asset Market Clarity Act would shift responsibility for digital asset markets from state and local agencies to the Commodity Futures Trading Commission.

James emphasized the importance of retaining authority at the state level, citing the significant role that state and local agencies play in law enforcement. She pointed out that complaints about cryptocurrency scams received by her office have tripled in the past three years, with reported losses totaling almost $500 million over the previous five years.

James also called for tougher compliance rules, stronger market monitoring, and greater liability for platforms that fail customers. She urged lawmakers to require cryptocurrency companies and intermediaries to compensate customers when they fail to prevent fraud, and to restrict the exchange of untraceable cryptocurrencies, including those linked to mixers, for US dollars.