New York Attorney General Letitia James has issued a strong call for lawmakers to prioritize the establishment of a federal framework for regulating cryptocurrencies. In a recent letter to influential members of Congress, including Senate Majority Leader John Thune and House Speaker Mike Johnson, she emphasized the urgent need for comprehensive regulations aimed at protecting digital asset investors from the increasing risks present in the cryptocurrency market.
According to Reuters, James proposed that cryptocurrency companies must register with a federal agency and that there should be minimum standards for listing digital tokens. This overhaul of regulations is intended to bring much-needed transparency and security to the rapidly evolving sector.
This plea for regulation comes at a time when Congress is preparing to pass a bill that would introduce new regulations for stablecoins—cryptocurrencies designed to maintain a stable value, typically pegged to the U.S. dollar. Stablecoins play a crucial role in the crypto market, facilitating transactions and allowing the transfer of funds between different digital assets such as Bitcoin and Ether. In her correspondence, James insisted that stablecoin issuers should maintain a U.S. presence and hold reserves, including U.S. Treasuries, in American banks to enhance consumer protection.
The momentum for stronger regulation is building in Washington, where the cryptocurrency sector has emerged as a significant political force. Industry stakeholders have contributed over $119 million in the 2024 elections, backing pro-crypto candidates. This financial engagement has attracted attention from lawmakers, with notable figures like former President Donald Trump advocating for substantial changes to U.S. crypto policies. Bo Hines, a key advisor to Trump on digital assets, recently indicated that the White House aims to see a stablecoin bill passed before August.
James highlighted the personal stakes for millions of American investors, especially in New York, where many have experienced financial losses due to scams and fraud in the cryptocurrency space. She stated, “Countless New Yorkers invest in cryptocurrency and digital assets, and more must be done to protect them and their money.” She further stressed that thousands of investors across the nation have lost millions to scams that could be mitigated with stronger federal regulations.
As discussions surrounding cryptocurrency regulation progress, James’ appeal for federal oversight underscores the growing concerns regarding the industry's impact on investors and the broader financial system.
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