New York Attorney General Letitia James, in her letter to the U.S. Congress, expressed the need for regulation of the cryptocurrency market. She emphasized the serious threats that the crypto industry may pose to the financial stability of the country.
This is reported by Finway
Threats from the Crypto Industry
Letitia James urged Congress to pass legislation that would regulate digital assets, outlining several significant risks arising from the development of the crypto market:
- Undermining the dominance of the U.S. dollar. James noted that the active adoption of cryptocurrencies weakens the U.S. position in global financial flows, particularly through sanctions mechanisms.
- Funding hostile states. According to her, countries such as North Korea, Iran, and Russia are using crypto instruments to evade international sanctions.
- Risks to the banking system. She mentioned the collapse of Silicon Valley Bank and Signature Bank in 2023, linked to cryptocurrencies.
- Lack of transparency in price formation. James characterized cryptocurrency exchanges as “unregulated and prone to manipulation.”
- Fraud. She reported that losses from crypto fraud in the U.S. exceeded $12 billion in 2024.
Regulatory Proposals
Letitia James proposed that all participants in the crypto market should register through appropriate authorities, such as the Securities and Exchange Commission. Among other initiatives were:
- Mandatory token fraud checks;
- Prohibition of combining the roles of issuer, broker, and custodian within one company.
She also emphasized that digital assets are entirely unsuitable for retirement savings due to their high level of volatility. James particularly highlighted the dominance of USDT in the U.S. short-term bond market, stressing the importance of monitoring stablecoin issuers.
“The U.S. must require that stablecoins be backed by U.S. dollars or Treasury bonds on a parity basis (1:1), and that they be issued by companies with a presence in the U.S., subject to U.S. laws, and under the oversight of federal and/or state authorities,” James stated.
It was previously reported that the working group of the U.S. Securities and Exchange Commission on cryptocurrency issues will hold a series of discussions aimed at regulating cryptocurrency assets.