- New York law enforcement has cited the crypto market as a loophole catalyzing crime.
- The Manhattan District Attorney has urged legislators to expedite crypto regulations.
- Enactment of the Clarity Act is much anticipated across the crypto industry in 2026.
Manhattan District Attorney Alvin Bragg has urged lawmakers to expedite the legislation of the crypto industry. Bragg spoke at the Center for New York and State Law, where he stated that clear crypto regulations are key to advancing public safety.
Manhattan District Attorney Calls for Crypto Regulations
According to District Attorney Bragg, crypto money laundering is part of systemic failure in advancing public safety. The former member of New York Law School stated that systemic accountability is as important as individual accountability in dismantling structures that enable crime.
Bragg stated that the crypto industry has helped in money laundering more than the traditional banking system due to loopholes in the Know Your Customer (KYC). Furthermore, Bragg stated that illegal funds are easily converted to crypto within the state using unregulated ATMs, peer-to-peer crypto exchanges, and sophisticated mixers.
According to Bragg, illegal funds hardly use crypto exchanges with strict KYC, such as Binance and Coinbase Global Inc. (NASDAQ: COIN). He stated that criminals are willing to pay higher fees, sometimes up to 20%, for anonymity, and further move the funds to different chains to enhance obfuscation.
As such, Bragg emphasized the need for legislators to move with speed in regulating the crypto industry to advance public safety. He stated that all crypto businesses involved in transferring, and trading must be licensed.
Most importantly, Bragg noted that the businesses involved in crypto operations must abide by the KYC obligations.
Related: Can One Bill Fix U.S. Crypto Rules? Inside the Push for the CLARITY Act
Bigger Picture
The United States under President Donald Trump has made several attempts to regulate the crypto industry. In 2025, President Trump enacted the Genius Act, which provided regulatory clarity on stablecoins.
Under the implementation of the Genius Act, Stablecoin issuers are expected to have a kill switch to freeze funds on request. Tether, the largest Stablecoin issuer, and Circle have worked with the Department of Justice (DOJ) and other law enforcement agencies to freeze funds associated with illicit activities.
For instance, Tether froze more than $182 million across five Tron (TRX) wallets earlier this week. As such, Tether has helped global law enforcement agencies freeze more than $3 billion, thus underscoring the importance of crypto in fighting crime.
Meanwhile, the U.S. Senate is currently discussing the Clarity Act, which will define clear rules for the wider crypto industry. The Clarity Act, which has currently stalled, is expected to bypass the Senate in the near term to foster development, and at the same time, could protect investors.
Furthermore, the Clarity Act will define the crypto jurisdictions of the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
Related: Senate Crypto Bill Classifies Network Tokens as Commodities Like BTC
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