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New York Attorney General Letitia James is urging Congress to implement a comprehensive federal regulatory framework for cryptocurrencies, citing a surge in fraud and consumer abuse tied to the largely unregulated digital asset sector.
In a formal letter submitted to the heads of several congressional committees, James outlined a series of recommendations aimed at establishing stronger oversight, transparency standards, and enforcement tools for federal agencies tasked with policing crypto markets.
“Without clear and consistent federal rules, crypto companies will continue to operate in legal gray areas—often at the expense of investors and everyday users,” said James.
A Push for Federal Action
While New York has been among the strictest states in regulating digital assets through its BitLicense regime, James emphasized that state-by-state enforcement is insufficient in addressing the scale and complexity of crypto-related fraud, which often crosses jurisdictions.
Her call adds pressure on Congress, which has faced criticism for its slow progress in passing comprehensive crypto legislation despite repeated scandals and market collapses in recent years.
Key Proposals from the NY AG
In her letter, James proposed several policy measures, including:
- Mandatory registration of crypto exchanges and wallet providers under a federal framework
- Stronger disclosure requirements for token issuers and DeFi protocols
- Enhanced consumer protections, including restrictions on misleading marketing and risky lending practices
- Clear legal definitions for digital assets to eliminate ambiguity between securities and commodities
She also urged Congress to give regulatory agencies like the SEC and CFTC expanded authority to oversee crypto markets more effectively.
Industry Response
Reactions from the crypto industry were mixed. Some groups acknowledged the need for clearer federal rules, but others warned that overly aggressive regulation could stifle innovation and push companies offshore.
“We agree that consumer protection is critical, but the solution must be nuanced and innovation-friendly,” said Kristin Smith, CEO of the Blockchain Association.
Meanwhile, consumer advocacy groups applauded James’ initiative, noting the ongoing risks posed by fraudulent crypto schemes, rug pulls, and misleading investment products.
The Bigger Picture
James’ intervention comes at a time of increased scrutiny of digital assets from U.S. regulators and lawmakers. Although several bipartisan bills have been introduced—such as the Digital Commodities Consumer Protection Act and the Financial Innovation and Technology Act—none have yet passed both chambers of Congress.
With presidential elections and financial market concerns looming, the pressure to act may be growing.
New York Attorney General Letitia James is calling on Congress to take decisive action on crypto regulation, warning that the current patchwork system is inadequate to protect consumers from growing risks in the digital asset space. Whether Congress responds with swift legislation remains to be seen.
