- NY Attorney General James urges Congress to pass robust federal regulations for investors.
- Crypto scams account for 10% of all financial fraud, with billions lost each year.
- James calls for stablecoin issuers to be regulated and backed by U.S. dollars or treasuries.
New York Attorney General Letitia James has called on Congress to act fast and establish better rules for cryptocurrencies and other digital assets. In a letter to congressional leaders, James expressed her concern that the lack of regulation has led to a significant increase in fraud, criminal activities, and financial system instability. She argued that the United States requires an adequate legal environment that can protect investors and guarantee their safety.
Crypto Fraud and Losses
James reported that crypto scams account for 10% of total fraud cases and contribute to half of all financial losses from fraud. These scams have affected investors in America, with millions of dollars’ worth of investments gone down the drain. Further, she noted that the industry was poorly regulated, thereby making it easy for members to defraud potential investors. James stated:
Thousands of investors in New York and across the country have lost millions of dollars to cryptocurrency scams and fraud.
Further, the attorney urged crypto companies to register with regulatory authorities and partner with platforms that comply with anti-money laundering (AML) laws. According to James, these measures would help prevent fraud and safeguard investors.
Also, James suggested that the U.S. should host stablecoin issuers, while stablecoins should rely on the U.S. dollar support to solve this issue. Also, she opined that this would help minimize fluctuation and compliance in cryptocurrency. While stablecoins have gained prominence among investors recently, they are mainly unregulated, thus leading to high risk among investors.
Related: OpenSea Seeks SEC Clarity on NFT Marketplace Regulations
Transparency and Investor Protection
The Attorney General also urged a higher level of transparency of cryptocurrency prices on trading platforms. She contended that this would remove conflicts of interest and speculation in the markets. Moreover, she suggested that digital assets should not be included in retirement accounts to safeguard long-term investments.
A longtime leader in crypto enforcement, James has pursued legal action against several companies, including NovaTechFx and KuCoin, seeking to recover billions of dollars for defrauded investors. She remains one of the most active figures in the U.S. when it comes to regulating the crypto industry.
James concluded her letter by reiterating the need for immediate congressional action. She argued that stronger federal oversight is essential to prevent further investor losses, stabilize markets, and protect the broader financial system.
