New York Attorney General Letitia James has urged lawmakers in the United States to pass federal legislation on cryptocurrencies.
In her letter on Thursday, April 10, Attorney General James warned that the lack of a robust federal regulatory framework for crypto raises the risk of fraud, crypto-related crime and financial instability.
A strong legal framework would help mitigate against these potential risks as well as allow for better protections for investors, James said. She addressed the letter to Senate Majority Leader John Thune, Senate Senate Minority Leader Charles Schumer, U.S. House Speaker Mike Johnson and House Minority Leader Hakeem Jeffries.
She averred that New York has countless cryptocurrency and digital assets investors, and that lawmakers have to do more to protect the investor 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. I am urging Congress to pass legislation that would strengthen federal regulations on the cryptocurrency industry to protect investors, strengthen financial markets, and stop fraud,” she said in a statement.
James said that lawmakers should require crypto companies to register with a federal regulatory agency and set minimum listing standards for crypto tokens
James’ letter to Congressional leaders comes just a day after the Department of Justice announced it was dismantling its crypto fraud investigative unit. It also comes on the back of notable progress in Washington regarding stablecoin regulation, with lawmakers in the Senate and House of Representatives passing key bills on stablecoins.
According to James, a federal legislative framework should force stablecoin issuers to have a presence in the U.S. The issuers, she argues, should deposit their stablecoin reserves – U.S. Treasuries and other cash equivalents – in local banks in the country.
Top stablecoins pegged to the U.S. dollar include Tether (USDT) and Circle’s USDC (USDC).
