New York Attorney General Urges Federal Action on Cryptocurrency Regulations
By Benson Toti
April 10, 2025
New York Attorney General Letitia James has called on Congress to take decisive action by passing comprehensive federal legislation to regulate the cryptocurrency industry. In a letter dated April 10, James highlighted the urgent need for a robust regulatory framework to safeguard investors and enhance market integrity.
Call for Stronger Regulations
In her correspondence, Attorney General James expressed her concerns about the rising incidents of fraud, crypto-related crime, and potential financial instability stemming from the lack of adequate federal oversight. "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," she remarked in her statement.
James directed her letter to key congressional leaders, including Senate Majority Leader John Thune, Senate Minority Leader Chuck Schumer, House Speaker Mike Johnson, and House Minority Leader Hakeem Jeffries. She emphasized the need for lawmakers to enhance investor protections and create a safer environment for cryptocurrency transactions.
The Necessity of Registration
In her letter, James proposed specific measures that she believes are crucial for effective regulation. She recommended that all cryptocurrency companies be required to register with a federal agency and adhere to minimum listing standards for crypto tokens. Such requirements, she argues, would help bring structural integrity to the market and bolster consumer confidence.
The Attorney General’s call for action comes on the heels of significant developments in Washington related to cryptocurrency regulation. This week, the Department of Justice announced the dismantlement of its crypto fraud investigative unit, raising concerns about the future of oversight in this rapidly evolving market.
Focus on Stablecoins
James also addressed the issue of stablecoins, which are digital currencies designed to maintain a stable value against traditional currencies such as the U.S. dollar. She suggested that a federal legislative framework should mandate stablecoin issuers to operate within the U.S. and maintain their reserves—primarily U.S. Treasuries and cash equivalents—in local banks. This would ensure that stablecoins are backed by tangible assets, thereby increasing their reliability.
Some of the prominent stablecoins mentioned include Tether (USDT) and Circle’s USDC (USDC), both of which are widely used in cryptocurrency transactions.
The Path Forward
As the cryptocurrency landscape continues to grow and evolve, the need for clear regulatory guidelines has become increasingly pressing. With Attorney General James’s appeal to Congress, the call for federal action represents an important step towards establishing a framework that regulates the crypto space while protecting investors from fraud and market manipulation.
As lawmakers respond to this pressing issue, stakeholders in the cryptocurrency industry will be watching closely to see how these developments unfold and what shape future regulations will take.
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