Apr 11, 01:03 PM

NY AG Urges Federal Crypto Regulation Amid $12B Fraud Losses; Illinois Senate and PROOF Act Respond

New York Attorney General Letitia James has urged Congress to enact federal legislation to regulate cryptocurrencies, citing the need to protect investors from fraud and market instability. James highlighted that crypto-related scams account for 10% of all financial fraud incidents and 50% of the total dollar losses from fraud cases, with an estimated $12 billion lost to crypto fraud in 2024 alone. James proposed several measures, including requiring stablecoin issuers to be based in the US and maintain reserves in US dollars or treasuries, and restricting crypto dealings to platforms compliant with anti-money laundering regulations. She also recommended banning digital assets from retirement plans due to their volatility and lack of intrinsic value, warning that unregulated crypto could threaten the dollar, national security, and market stability. In addition to the call for federal regulation, legislative efforts are underway to address crypto-related issues. The Illinois Senate passed the Digital Assets and Consumer Protection Act, targeting crypto crime, while Senators Thom Tillis and John Hickenlooper reintroduced the Proving Reserves of Others Funds (PROOF) Act. This bill aims to prevent the co-mingling of customer funds and establish Proof of Reserve standards for digital asset institutions.