New York AG Letitia James warned Congress that state-level crypto enforcement could weaken, citing $500M in fraud losses. Meanwhile, $445M in liquidations and $9.23M ETH ETF inflows reshaped liquidity.
New York Attorney General Letitia James warned Congress that proposed federal legislation could weaken state-level crypto enforcement. The warning came as $445 million in forced liquidations and shifting ETF flows highlighted market fragility.
In written testimony submitted to Congress, James argued that the Digital Asset Market Clarity Act could pre-empt state rules and transfer key supervisory authority to the CFTC. She said that risks diluting the ability of state and local authorities to police misconduct, an issue intensifying as retail participation grows.
James said complaints related to crypto fraud filed with her office have tripled over the past three years, with reported losses reaching roughly $500 million over a five-year period. She called for stronger baseline requirements for crypto platforms, including anti-money laundering controls and cybersecurity standards, along with customer identification (KYC) and monitoring for suspicious transactions. Platforms that fail to prevent customer losses from fraud should face financial accountability, she added.
The political debate around market structure is also sharpening. Senator Chris Murphy publicly said he would vote against the Clarity Act, according to reports, arguing that it is fundamentally corrupt for President Trump to be a major participant in the crypto industry while also influencing regulation of the sector.
Spot Ethereum ETFs recorded a net inflow of $9.23 million on July 27, according to SoSoValue data. BlackRock's iShares Ethereum Trust (ETHA) led with $11.75 million of net inflows, bringing its cumulative net inflows to $11.42 billion. Invesco's QETH posted a $2.52 million net outflow. Total net assets across U.S. spot Ethereum ETFs were estimated at $10.65 billion, around 4.53% of Ethereum's market cap.
Separately, on-chain monitoring showed a wallet associated with BlackRock's ETF operations transferring more than $271 million worth of crypto to Coinbase Prime, including 3,310 Bitcoin valued at about $216 million and 28,400 ETH near $55.68 million. Analysts tracking the transaction said the move could reflect rebalancing or sell-side preparation.
In exchange-related developments, Upbit said it plans to list RLUSD, a Ripple-related stablecoin, on its Korean won, BTC, and Tether markets. Binance also announced it will remove several spot trading pairs after a periodic review, including ERA/BNB, MAGIC/USDC, MASK/USDC, MOVE/TRY, MOVE/USDC, POL/BTC, STORJ/TRY, and SUSHI/USDC, effective July 31. The underlying tokens may continue trading via other pairs.
Macro-regulatory concerns were highlighted in Brazil, where the IMF said crypto-based cross-border flows have climbed steadily since 2017 and have surpassed traditional capital flow volumes. The IMF attributed a large portion of this activity to stablecoins, which it said are used by both firms and retail participants for efficiency and tax-related reasons. The IMF also said gaps remain in legal consumer protections and safeguards such as segregation of custodial assets. Brazil's Congress is preparing to review Bill 4308/2024, which would define the legal status of stablecoins.
Market volatility was evident in derivatives. CoinGlass data showed approximately $445 million in forced liquidations over the past 24 hours, impacting 116,561 traders. Long liquidations totaled about $214 million, while short liquidations reached roughly $230 million. Binance accounted for about $208 million, followed by Bybit at roughly $55.1 million, OKX at about $44.15 million, and Hyperliquid at around $48.45 million. The largest single liquidation was an ETHUSDT position on Aster worth approximately $8.72 million.
Elsewhere, on-chain data indicated Bitmine received 7,500 ETH, about $14.61 million, from BitGo, in what observers described as continued accumulation. In corporate treasury news, Australian-listed DigitalX said it sold 80 BTC, lifting its cash holdings to $21 million. Bitcointreasuries.net data showed DigitalX now holds 283 BTC, ranking 79th among public companies tracked for Bitcoin holdings.
The day's crypto market analysis events showed a market balancing regulatory risk with accelerating institutional infrastructure: lawmakers debate who should police crypto, while ETF flows, exchange listings, and on-chain transfers continue to reshape near-term liquidity conditions across major assets.
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