"Damages alone $11 billion"...New York State pressures for cryptocurrency bill amendment

▲ U.S. Congress, cryptocurrency regulation, cryptocurrency crime/AI generated image

With cryptocurrency fraud damages exceeding $11 billion, the debate over regulation in the U.S. Congress has intensified again. Criticism that it could weaken state governments' investigative powers is putting pressure on the U.S. cryptocurrency market structure bill.

According to Bitcoin.com on August 2 (local time), New York Attorney General Letitia James urged Congress to strengthen cryptocurrency regulations. She also emphasized that state governments' authority to track fraud cases must be maintained. James stated, “Congress must protect financial markets, investors, the U.S. economy, and national security.”

James pointed out that the U.S. Cryptocurrency Market Structure Bill (CLARITY Act) transfers primary oversight authority over digital assets to the U.S. Commodity Futures Trading Commission (CFTC). She argued that the bill could even limit state governments' core regulatory powers. She warned that it could become difficult for New York State to investigate fraud cases and hold cryptocurrency companies accountable. The number of cryptocurrency fraud complaints received by the New York State Attorney General's office has nearly tripled in the past three years. Reported damages over the past five years have approached $500 million.

James asserted that anti-money laundering (AML) and know-your-customer (KYC) regulations should be applied to cryptocurrency platforms. She also stated that cybersecurity standards and market surveillance obligations should be strengthened. She proposed that platforms should bear financial responsibility for preventable fraud. She also believes that existing laws related to securities, commodities, and money transfers should be maintained. A plan to restrict cryptocurrency transactions that cannot be fully traced through the process of conversion to U.S. dollars was also suggested.

The U.S. House of Representatives passed the U.S. Cryptocurrency Market Structure Bill in July 2025. House members held a hearing a year later to again pressure for the bill's passage. The Senate's review schedule remains uncertain. James also presented regulatory cases against Tether, Coin Café, Gemini, Genesis, and Kucoin. Uphold agreed to pay more than $5 million in connection with the promotion of its CredEarn investment program.

According to the U.S. Federal Bureau of Investigation (FBI), cybercrime damages reported by Americans in 2025 approached $21 billion. Cryptocurrency-related complaints totaled 181,565 cases. Damages exceeded $11 billion, making it the largest amount among all types of reported incidents. New York State is also warning about cryptocurrency fraud that leverages romantic relationships to induce investment. James criticized the stablecoin regulation law GENIUS for not imposing responsibility on issuers to return stolen funds to victims.

[Article Key Summary]

-In 2025, cryptocurrency-related reported damages in the U.S. exceeded $11 billion, with 181,565 complaints.

-New York Attorney General Letitia James warned that the U.S. Cryptocurrency Market Structure Bill could weaken state governments' authority to investigate fraud.

-James urged strengthening anti-money laundering, know-your-customer, and cybersecurity obligations for cryptocurrency platforms.

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