NY AG Warns Federal Crypto Bill Would Weaken State Enforcement
New York Attorney General Letitia James is sounding the alarm over proposed federal legislation that could weaken state enforcement of cryptocurrency companies. In written testimony submitted to the Senate Permanent Subcommittee on Investigations, James warned that the Digital Asset Market Clarity Act would override state regulation and shift oversight to the Commodity Futures Trading Commission.
James pointed out that complaints about crypto scams have tripled over the past three years in her office, with reported losses totaling nearly $500 million over five years. She urged Congress to strengthen oversight of cryptocurrency companies and comply with anti-money laundering, know-your-customer, and cybersecurity requirements.
The Attorney General also called for platforms and intermediaries to be held financially liable when they fail to protect customers from fraud. Additionally, she proposed prohibiting the conversion of mixer-linked or otherwise untraceable crypto into US dollars and preserving existing state money transmission, commodities, and securities laws.
James further suggested barring elected officials and recent government officials from regulating crypto if they have financial interests in the industry.