NY Attorney General urges Congress to bolster protections in crypto bills

New York Attorney General Letitia James has urged Congress to strengthen protections in pending stablecoin and cryptocurrency legislation, arguing that current bills do not adequately safeguard investors or address risks associated with unregulated crypto transactions.

In a letter to Congress, she criticized the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act and the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act for lacking necessary regulatory guardrails, particularly to prevent anonymous transactions that could facilitate fraud, criminal activity, and threaten national security.

James specifically called for stablecoin issuers to be regulated like banks. She also recommended that issuers maintain a U.S. presence, back stablecoins with U.S. dollars or Treasuries, and implement digital identity technology for all transactions to prevent illicit use.

Additionally, James emphasized the need for cryptocurrency companies to register with a federal regulatory body, actively identify and prevent fraud and scams, promote price transparency, and comply with anti-money laundering standards. She warned that without stronger federal regulations, investors remain vulnerable to scams, and the economy and national security are at risk due to the potential misuse of digital assets for criminal financing.

Her call to action comes amid growing legislative efforts, with the Senate recently passing the GENIUS Act and the House Committee advancing the STABLE Act, but she insists that Congress must take more time to draft comprehensive legislation that balances innovation with robust investor protections and banking system safeguards.

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