New York AG Urges Congress to Create Robust Crypto Regulatory Framework to Prevent Fraud

Letitia James, New York Attorney General (NY AG), has sent a letter to U.S. congressional leaders, urging them to “create common sense federal regulation for digital assets.”

She flagged the “unique risks” posed by cryptos, calling for a change in order to “serve America’s national interests.”

“We write to identify various of these risks and suggest tenets of regulation to guard against them,” her letter read.

The NY AG urged saying, lawmakers should mandate that crypto companies register with a federal regulatory agency. The firms must register to establish minimum listing standards for crypto tokens, she added.

The letter comes as Congress prepares to pass GENIUS Act – a bipartisan step to provide regulatory clarity for stablecoin payments.

Besides, James noted that lawmakers should require stablecoin issuers to have a U.S. presence. Onshoring stablecoins would help protect the U.S. dollar and the treasuries market, James noted.

Bitcoin Threat to Dollar Dominance

The NY AG highlighted fraud risks and Bitcoin’s challenge to the U.S. dollar’s dominance. She noted that the growing crypto influence specifically Bitcoin, could undermine the U.S. dollar’s dominance in the global financial system.

James also stressed that the displacement of the USD’s dominance by Bitcoin would weaken the dollar and “the ability for America to enforce its interests globally and to finance a robust economy.”

Increasing Crypto Fraud Activities Need to Be Under Check: NY AG

AG James called for stronger federal regulations to protect investors from increasing fraud and criminal activity within the digital asset space. She noted:

“Countless New Yorkers invest in cryptocurrency and digital assets, and more must be done to protect them and their money. Thousands of investors in New York and across the country have lost millions of dollars to cryptocurrency scams and fraud that could be prevented with stronger federal regulations.”

New York lawmakers already introduced a new bill on March 5 aimed at combating cryptocurrency fraud, particularly rug pulls. The proposal came at a time when several high-profile incidents were reported involving meme coins.