New York Attorney General Letitia James is sounding the alarm about the risks of cryptocurrency and is calling on U.S. lawmakers to bring in stronger national rules. She believes that digital currencies like Bitcoin could weaken the U.S. dollar’s global power if left unchecked—and could hurt everyday people through scams and risky investments.
In a letter to Congress sent on April 10, 2025, James urged leaders to create a clear federal system to regulate digital currencies. Right now, different states have different rules, and that patchy system is making it easier for fraudsters and risky crypto companies to operate.
“Millions of New Yorkers use crypto, and they need to be protected,” she said.
Her concern isn’t just about scams. She pointed out that Bitcoin is increasingly being used to send money across borders, and that could slowly chip away at the U.S. dollar’s role as the world’s go-to currency.
This view lines up with what BlackRock CEO Larry Fink recently said—he sees Bitcoin as a hedge against the dollar, especially as the U.S. faces high inflation and rising debt.
The Risk of Stablecoins and Crypto Scams
James also singled out stablecoins—cryptocurrencies tied to steady assets like the U.S. dollar. She wants Congress to make sure that stablecoins are:
- Issued by companies based in the U.S.
- Backed 100% by U.S. dollars or government bonds.
Why? Because without clear rules, some stablecoins can be misleading or even dangerous. For example, the collapse of TerraUSD (UST) in 2022 wiped out over $40 billion in value, leaving investors shocked and angry when what they thought was a “safe” coin turned out to be unstable.
James said more rules would prevent such disasters in the future. She added that thousands of people in New York—and across the U.S.—have lost millions of dollars to crypto scams that might have been avoided with better oversight.
The Attorney General also warned people not to invest their retirement savings in crypto. She pointed to the wild price swings of Bitcoin, which can jump or drop by over 10% in a single day, as proof that crypto is too risky for IRAs and 401(k)s.
This comes as some big firms, like Fidelity, have started offering crypto options in retirement accounts. But James believes that for most Americans—especially older folks relying on their savings—this could be financially devastating.
James also raised the issue of crypto being used for crime, since many transactions are anonymous. She wants all crypto companies to:
- Register with U.S. regulators
- Follow anti-money laundering rules
This isn’t just theory. In recent years, U.S. law enforcement has tied crypto to funding of ransomware attacks, drug trafficking, and terrorist organizations. For example, in 2020, the U.S. Department of Justice seized over $2 million in Bitcoin linked to terror groups.
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