New York Attorney General Letitia James said the federal crypto market structure bill could restrict state regulators and urged Congress to impose stronger consumer protections on digital asset platforms.
New York Attorney General Letitia James urged Congress to strengthen oversight of cryptocurrency companies, warning that proposed federal legislation could weaken states’ ability to investigate scams and hold platforms accountable.
In written testimony submitted Monday to the Senate Permanent Subcommittee on Investigations, James said the Digital Asset Market Clarity Act would override state regulation of digital asset markets and shift oversight to the Commodity Futures Trading Commission. She argued that this would undermine state and local enforcement.
According to the attorney general, complaints about crypto scams received by her office have tripled over the past three years, while reported losses totaled nearly $500 million over five years.
James called for crypto platforms to comply with anti-money laundering, know-your-customer, and cybersecurity requirements, and to conduct surveillance for suspicious activity and market manipulation.
She also urged Congress to make platforms and intermediaries financially liable when they fail to protect customers from fraud, to prohibit the conversion of mixer-linked or otherwise untraceable crypto into US dollars, and to preserve existing state money transmission, commodities and securities laws.
James also proposed barring elected officials and recent government officials from regulating crypto when they may have financial interests in the industry.
Related: Crypto advocacy groups support CLARITY passage as ethics rules face pushback
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