Key Takeaways
New York AG warns the CLARITY Act may restrict state fraud enforcement.FBI studies $11 billion in crypto losses as Letitia James requires more durable guidelines.Proposal requires stronger AML, KYC, and platform accountability.
James Warns Federal Invoice May Weaken State Enforcement
New York Lawyer Common Letitia James referred to as on Congress to undertake stronger federal safeguards for cryptocurrency markets whereas preserving state authority to pursue fraud instances, arguing that rising rip-off losses require more durable oversight as a substitute of limiting state enforcement.
“My workplace has been main the battle in opposition to cryptocurrency fraud. Our rules-based market system provides folks confidence that they’ll do enterprise right here,” James said in her congressional testimony on July 27. She added:
“With out enough legal guidelines and rules, monetary crises ensue. We urge Congress to safeguard our monetary markets and defend America’s buyers, their future, our economic system, and nationwide safety.”
Lawyer Common James argued that the CLARITY Act would switch main oversight of digital property to the Commodity Futures Buying and selling Fee (CFTC) whereas overriding vital state regulatory authority, making it tougher for states to research fraud and maintain cryptocurrency companies accountable.
Complaints submitted to James’ workplace about cryptocurrency scams nearly tripled over the previous three years, whereas reported crypto fraud and rip-off losses approached $500 million over the previous 5 years.
Proposed Guidelines Goal Fraud, Cash Laundering, and Platform Accountability
Lawyer Common James urged Congress to require cryptocurrency platforms to adjust to anti-money laundering (AML) guidelines, know-your-customer (KYC) necessities, cybersecurity requirements, market surveillance obligations, and monetary accountability for preventable fraud, whereas preserving current securities, commodities, and cash transmission legal guidelines.
She additionally really useful proscribing cryptocurrency transactions that can not be totally traced from conversion into U.S. {dollars} and prohibiting elected officers and individuals who just lately served in authorities from collaborating in cryptocurrency regulation when monetary conflicts could exist.
Federal lawmakers proceed debating the CLARITY Act after the Home accepted the laws in July 2025. A yr later, Home lawmakers renewed their push for the invoice at a listening to analyzing its proposed digital asset regulatory framework, whereas Senate motion remained unsure.
The legal professional normal highlighted a number of enforcement actions supporting her argument, together with settlements involving Tether, Coin Café, Gemini, Genesis, Kucoin, and a current settlement requiring Uphold to pay greater than $5 million over its promotion of the CredEarn funding program.
FBI’s $11 Billion Crypto Loss Determine Provides Stress for Harder Guidelines
Federal authorities proceed to report substantial monetary losses from cryptocurrency-enabled crime. The Federal Bureau of Investigation (FBI) mentioned People reported almost $21 billion in cyber-enabled losses in 2025, including: “People who submitted complaints involving cryptocurrency reported the best losses, with 181,565 complaints totaling greater than $11 billion.”
New York has additionally expanded shopper safety efforts past enforcement actions by warning residents about relationship-based cryptocurrency funding scams generally often called “pig butchering” schemes. James has additionally criticized the GENIUS Act for failing to require stablecoin issuers to return stolen funds to fraud victims.
