New York Attorney General Letitia James is urging Congress to strengthen oversight of cryptocurrency companies, warning that scams reported to her office have tripled in three years.
New Yorkers reported nearly $500 million in cryptocurrency scam losses to the attorney general's office over the past five years, according to testimony James submitted to a U.S. Senate investigations subcommittee.
James criticized the Digital Asset Market Clarity Act, which would give oversight of digital assets to the Commodity Futures Trading Commission and override state regulation of digital markets. She said that approach would limit state and local enforcement and make it harder to hold platforms accountable.
Her proposal calls for cryptocurrency platforms to follow anti-money laundering, customer identification and cybersecurity rules. It would also require platforms to monitor transactions for manipulation and suspicious activity.
James also called for restrictions on cryptocurrencies designed to conceal transactions, including a prohibition on converting assets passed through money-laundering mixers into U.S. dollars.
The attorney general said platforms and intermediaries should be financially liable when they fail to protect consumers from fraud, similar to protections under federal electronic funds transfer law.
James also urged Congress to prevent elected officials and recent government officials from participating in cryptocurrency regulation when they could profit from the industry.
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