NY AG Warns Federal Crypto Bill Could Weaken State Enforcement

New York Attorney General Letitia James has expressed concerns that proposed federal legislation could undermine state regulation of digital asset markets. In written testimony submitted to the Senate Permanent Subcommittee on Investigations, she warned that the Digital Asset Market Clarity Act would shift oversight from states to the Commodity Futures Trading Commission.

James argued that this change would weaken states' ability to investigate scams and hold platforms accountable. She pointed out that complaints about crypto scams received by her office have tripled over the past three years, with reported losses totaling nearly $500 million over five years.

The attorney general called for stricter regulations on crypto platforms, including compliance with anti-money laundering, know-your-customer, and cybersecurity requirements. She also urged Congress to make platforms and intermediaries financially liable when they fail to protect customers from fraud.