New York AG Fights Crypto Bill That Coinbase Wants Passed

New York Attorney General Letitia James is strongly opposing a major crypto bill currently moving through the Senate. Coinbase wants lawmakers to pass the legislation quickly, but James argues the proposal would leave scam victims with nowhere to turn by overriding state investor protection laws. The Digital Asset Market Clarity Act would shift most rulemaking to the Commodity Futures Trading Commission, a move that James says strips power away from local cops who handle the vast majority of criminal cases.

Crypto scam losses have surged across the board. The FBI reported 2025 internet crime losses reaching $11.4 billion, while New York complaints nearly tripled over a three year period. James highlighted that state and local agencies handle about 99.5 percent of criminal cases, meaning federal bodies alone cannot shoulder the burden of tracking down bad actors. She also criticized ethics provisions in the bill, pointing out that a proposed ban on officials owning crypto contains major loopholes and delayed start dates.

The political battle lines are sharply drawn. Coinbase argues that the legislation is necessary to keep the United States competitive against China, while major banks are split on the measure. The National Sheriffs Association and state securities regulators are also urging the Senate to vote no, primarily over concerns regarding privacy tools and state authority. Senate Majority Leader John Thune noted that the required votes are currently missing, making a quick passage unlikely.

Traders and market observers should monitor upcoming Senate votes on key amendments, any changes to the proposed ethics delays, and whether lawmakers can reach a compromise. While proponents argue the framework brings much needed clarity to the industry, state regulators remain determined to protect their ability to pursue fraud.