New York Attorney General Letitia James says a crypto bill in the Senate would leave scam victims with nowhere to turn. Coinbase wants that same bill passed within days.

James sent her case to a Senate investigations panel on Monday. She wants tougher crypto oversight, not less of it.

Why Is New York Fighting the Crypto Oversight Bill?

The bill is called the Digital Asset Market Clarity Act. It would hand most crypto rulemaking to one federal agency, the Commodity Futures Trading Commission (CFTC).

It would also override state investor protection laws. That is the part James cannot accept.

Her office polices securities and commodities for 20 million New Yorkers. Take away that power, she argues, and scam victims lose their closest cop.

The House already passed the bill in July 2025. The vote was 294 to 134. It cleared a key Senate committee in May.

How Bad Are Crypto Scam Losses?

Bad, and getting worse. Her testimony stacks up four separate datasets.

The average victim reported losing $62,604, according to the FBI. Crypto complaints to the bureau rose 21% in a year.

James names real cases. One scam worked through Haitian church prayer groups. Another used Facebook ads to hook Russian speakers, then ran the money to Vietnam.

Who Actually Catches Crypto Criminals?

This is the heart of her argument, and the numbers are lopsided.

State and local agencies are 99% of all US law enforcement bodies. They handle about 99.5% of criminal cases and 98.8% of arrests.

Federal authorities handle roughly 1.2%.

At the same time, Washington has pulled back. The Justice Department told prosecutors in April 2025 to stop charging platforms for what their users do. It shut down its crypto enforcement team.

The SEC closed more than 1,000 investigations in 2025. It also dropped seven crypto cases. Judges had already found violations in five of them.

Does the Bill’s Ethics Ban Actually Work?

Here is the finding buried deepest in her filing.

The bill would stop presidents and federal officials from launching their own crypto. Supporters call this the ethics fix.

James read the fine print. The ban would let the sitting president park existing crypto businesses in a blind trust. It would also not start until a full year after the bill becomes law.

She wants something stricter. Officials should not regulate any industry they earn money from. Break that rule and you hand back the profits plus a $50,000 fine each time.

Her case points to Binance, which holds 87% of USD1. That is a stablecoin issued by World Liberty Financial, a firm founded by the president’s family. Forbes and the New York Times reported those holdings.

Who Else Opposes the Bill?

Not just Democrats. The nation’s sheriffs are against a big piece of it too.

The National Sheriffs’ Association wrote to the Senate on May 13. Their letter targets Section 604.

That section would excuse mixers and similar tools from money transmitter rules. Mixers scramble crypto transactions so nobody can follow the money.

The sheriffs still want crypto rules. They just want a narrower version, written by Senator Catherine Cortez Masto.

State securities regulators piled on in May. Their national body urged senators to vote no.

Why Does Coinbase Want a Vote Now?

Coinbase makes a completely different argument. It is about China, not fraud.

Faryar Shirzad is the company’s chief policy officer. He told Fox Business that the next financial system is being built right now.

China is spending the most on it, he said. So the real question is who writes the rules, Washington or Beijing.

Shirzad also likes what the bill does for banks. One whole section protects them from legal surprises when they touch crypto.

He says he has talked to Senate leaders. He expects a vote as early as August 3.

Wall Street is split. Goldman Sachs boss David Solomon backs the bill even though he calls it flawed. JPMorgan’s Jamie Dimon is against it.

What Happens Next?

The math does not work yet. Senate Majority Leader John Thune said on July 23 that the votes are missing. The bill now looks unlikely to pass before the August break.

Three fights are still open. Ethics rules, the Section 604 exemption, and how stablecoins pay interest.

History offers hope to both camps. The GENIUS Act stalled the same way in 2025, then became law. But that bill never asked states to give up their fraud cases.

So watch for three things. A vote on the Cortez Masto amendment. Any move to scrap the one-year delay. And the first Democrat to break ranks.

James has spent five years clawing money back from crypto firms. Her office went after major platforms including Genesis, which paid $2 billion. Gemini returned $50 million to customers.

Now she is asking Congress to leave that power alone.

Source: BeInCrypto