Letitia James to Lawmakers: Stop Crypto Fraud, Protect the U.S. Dollar and Pensions

In a strong appeal to U.S. lawmakers, New York Attorney General Letitia James has called for “common sense” federal regulations to bring more control to the fast-growing cryptocurrency industry. In a detailed 14-page letter sent on April 10, she urged congressional leaders to pass legislation aimed at protecting American investors, stabilizing financial markets, and stopping fraud linked to digital assets.

Why the Urgent Need for Regulation?

According to James, the crypto industry poses serious risks if left unregulated. She warned that without proper rules, the spread of digital assets could harm the dominance of the U.S. dollar and even impact national security. Criminal activity in the crypto space is a growing concern, as it creates opportunities for fraud and illegal financial movement.

James also emphasized that unregulated crypto markets lead to price manipulation and cheating, which end up costing regular people billions of dollars. She believes this not only drains money from American families but also weakens the U.S. economy.

Six Major Risks Highlighted

The letter outlines six major threats from an unregulated crypto sector:

1. Loss of U.S. dollar dominance
2. Increased criminal activity
3. Weakened national security
4. Unstable financial markets
5. Fraud and scams targeting everyday investors
6. Drain of financial resources from the American economy

James stated that the crypto market’s lack of transparency and fair pricing allows bad actors to take advantage of investors.

Clear Recommendations for Congress

To tackle these risks, James made several key suggestions for lawmakers. She wants stablecoin issuers to operate under U.S. laws and be fully backed by U.S. dollars or treasury assets. She also recommended:

• Mandatory U.S. presence for stablecoin issuers
• Oversight by financial regulators
• Partnerships only with anti-money laundering-compliant platforms
• Registration requirements for issuers and intermediaries
• Strong fraud prevention measures
• Rules to prevent conflicts of interest
• Transparent pricing mechanisms

These steps, she says, are needed to bring order and trust to a space that’s growing too fast without enough control.

Crypto and Pension Funds: A Risky Mix

One of the most urgent warnings in James’s letter was about retirement savings. She believes that crypto is not suitable for pension funds because of its extreme price swings and lack of real value. She argued that cryptocurrency prices aren’t based on any solid asset, making them too unpredictable for long-term savings.

James also criticized crypto-linked exchange-traded funds (ETFs), saying they are different from traditional ETFs backed by stocks or bonds. She pointed out that the crypto held by these ETFs could be permanently stolen, putting retirement savings at major risk.

Final Thoughts: A Call for Action

As the federal government considers how to approach crypto legislation, James hopes lawmakers will take firm action to limit the risks to America’s financial stability, security, and citizens. Her message is clear: without smart regulations, the country’s economy and people are left exposed.

This call for regulation comes just as the U.S. Department of Justice reportedly shut down its crypto fraud enforcement division, making James’s warning even more timely.

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