New York Attorney General (NYAG) Letitia James sent a letter To congress leaders on 10 April and urge the approval of federal legislation to set up a Crypto regulation framework.
The letter argued that the lack of national rules increases the risk of financial fraud, criminal abuse and market instability in the digital assets sector.
Attorney General James stated that crypto-related scams represent 10% of all financial fraud incidents and 50% of the total dollar losses from fraud cases.
In 2024, she mentioned an estimated $ 12 billion in crypto fraud. In her letter, James claimed that stronger federal supervision would reduce losses and improve investor protection, stabilizing financial markets and strengthening national security.
Moreover, the letter emphasized that the absence of federal regulation makes price manipulation and opaque practices within cryptomarkets possible.
James called for legislation that would impose uniform standards on crypto companies that are active in the US, including registration requirements and compulsory efforts to identify and reduce fraud.
She noted that because of their pseudonymous nature, digital assets are increasingly being used to facilitate criminal operations and in some cases to finance opponents.
Supervision of stablecoins, platforms and pension accounts
The letter suggested various provisions, including legislation that requires Stablecoin expenditure in the US and maintain reserves in American dollars or treasure chests. According to the proposed framework, these issuers and other intermediaries would also be subject to registration and compliance obligations.
James also advised to limit crypto transactions to Anti-Witwaveren (AML) conforming platforms and maintaining the inclusion of digital assets in pension accounts.
The NYAG has also compiled a list with legal requirements that reportedly would cause a wider transparency in cryptom markets. These include protection against conflicts of interest, increased price recording and legal accountability for all intermediaries.
She wrote that such standards are needed to protect retail investors against opaque and fraudulent business practices that continue to evolve without extensive supervision.
The letter follows the recent restructuring of the US Department of Justice of the enforcement initiatives of crypto fraud. James argued that the clarity of the regulations is now critical in view of this shift in the federal enforcement attitude.
She added that the enforcement burden cannot fall exclusively on state rulers, especially because digital assets are increasingly embedded in financial systems.
The letter repeated the position of James that uniform federal legislation is essential to prevent market abuse and to promote accountability. She claimed that clear federal rules can help eliminate meshes that can maintain fraudulent activities in various areas of law.
