Bitcoin’s Impact Alarming, Says NY Atty. General—Congress Needs To Act

New York Attorney General Letitia James issued a warning to US congressional leaders regarding regulation of cryptocurrency, particularly how Bitcoin and other virtual currencies could erode the US dollar’s position around the world. She urged stronger federal regulations to protect investors from fraud and criminal use in the cryptocurrency market.

NY’s Top Lawyer Demands Stricter Crypto Restrictions

James emphasized the importance of a federal regulatory system for digital currencies in her Congressional letter. She identified that lacking regulation, these type of currencies expose users to fraud and monetary volatility.

Bitcoin currently presents an actual threat to the dominance of the dollar, particularly since more businesses and individuals opt for digital currencies when sending money overseas, James indicated.

Her concerns echo those of BlackRock CEO Larry Fink, who suggested that Bitcoin could serve as a hedge against the dollar amid US fiscal challenges and rising inflation.

“Millions of New Yorkers actively buy, sell or hold cryptocurrency and other digital assets, and they deserve further protection,” James wrote in her message.

NEW: This morning @NewYorkStateAG Letitia James sent a letter to congressional leaders @LeaderJohnThune, @SenSchumer, @SpeakerJohnson and @RepJeffries urging them to pass a federal regulatory framework for digital assets to mitigate fraud, criminal activity, and financial… pic.twitter.com/yJjDgBqdBt

— Eleanor Terrett (@EleanorTerrett) April 10, 2025

Stablecoin Safeguards And Investor Protection Measures

The Attorney General placed particular emphasis on stablecoins, which are cryptocurrencies pegged to stable assets such as the US dollar. She called on lawmakers to establish regulations mandating that stablecoin issuers have a US presence and support their tokens with US dollars or treasuries.

James described how stablecoins facilitate the exchange of value among various cryptocurrencies but, in the absence of regulation, can be manipulated and create fraud.

She also demanded greater protections from crypto scams that have resulted in tremendous financial losses. “Thousands of New Yorkers and investors nationwide have lost millions of dollars to cryptocurrency scams and fraud that can be avoided with more robust federal regulations,” James said.

James actually cautioned against having digital assets in retirement accounts like IRAs. She contended that cryptocurrencies are too volatile and risky for retirement savings plans, citing the extreme price fluctuations of Bitcoin as proof of instability capable of injuring the financial well-being of individuals, especially retirees relying on savings. This is because financial institutions like Fidelity began offering crypto IRA options to clients.

In addition to investor protection, James also contended that thorough crypto regulations would enhance national security. She explained that cryptocurrency purchases are usually anonymous and used for criminal activities, thus necessitating the government to implement stringent rules mandating crypto firms to register with regulators and adhere to anti-money laundering protocols.

Featured image from Dado Ruvic/REUTERS, chart from TradingView