New York Attorney General Advocates for Federal Crypto Regulations

According to Cointelegraph, New York Attorney General Letitia James has urged U.S. congressional leaders to implement comprehensive federal regulations for the cryptocurrency industry. In a letter dated April 10, James emphasized the need for legislation to protect investors, enhance financial market stability, and prevent fraudulent activities. She outlined six significant risks associated with the lack of regulation, including the potential undermining of the U.S. dollar's dominance and national security threats due to criminal activities. James expressed concerns that the unregulated proliferation of digital assets could lead to price manipulation and rigged markets, facilitating fraud that drains billions from American investors and extracts assets from the economy. She recommended that Congress enact laws requiring stablecoin issuers to maintain a U.S. presence and regulatory oversight, ensuring stablecoins are backed by U.S. dollars or treasuries. Additionally, she advocated for regulations mandating platforms to collaborate only with entities compliant with anti-money laundering standards, establish registration requirements for issuers and intermediaries, protect against conflicts of interest, promote price transparency, and enforce fraud prevention measures. The Attorney General also voiced her opposition to the inclusion of cryptocurrencies in pension funds, citing their high volatility and lack of intrinsic value. She argued that digital assets are unsuitable for retirement savings and warned against investing in crypto-tracking exchange-traded funds, which she claimed are vulnerable to permanent theft. James urged Congress to consider the risks posed by the cryptocurrency industry to national security, financial stability, and American citizens as it drafts legislation governing the sector. This call for regulation comes in the wake of the U.S. Department of Justice's reported dismantling of its federal criminal cryptocurrency fraud enforcement division. James's appeal highlights the ongoing debate over the need for regulatory oversight in the rapidly evolving digital asset landscape.