State watchdog Galvin challenges U.S. federal crypto framework
Massachusetts Secretary of the Commonwealth William Galvin has raised concerns over efforts in Congress to establish a unified federal framework for cryptocurrency oversight, arguing that such legislation could undermine the protections currently enforced by state regulators.
Speaking on October 9, Galvin cautioned that the proposed federal model risks reducing the ability of state agencies to act swiftly against crypto-related fraud and misconduct.
He said that his office, which oversees the Massachusetts Securities Division, has repeatedly encountered cases of deceptive practices in the digital asset sector. According to him, replacing local enforcement with a single federal structure could leave retail investors more vulnerable to manipulation and scams. Galvin stressed that the current network of state-level protections has worked effectively for decades and warned that dismantling it in favor of an untested national regime would be a dangerous experiment.
The debate comes as lawmakers in Washington continue to negotiate comprehensive crypto legislation aimed at defining the responsibilities of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Under the current draft, the CFTC would take primary responsibility for regulating most digital asset trading, while the SEC would retain oversight of securities tokens. Critics, however, believe this approach could narrow the SEC’s authority and create regulatory blind spots.
He said that his office, which oversees the Massachusetts Securities Division, has repeatedly encountered cases of deceptive practices in the digital asset sector. According to him, replacing local enforcement with a single federal structure could leave retail investors more vulnerable to manipulation and scams. Galvin stressed that the current network of state-level protections has worked effectively for decades and warned that dismantling it in favor of an untested national regime would be a dangerous experiment.
The debate comes as lawmakers in Washington continue to negotiate comprehensive crypto legislation aimed at defining the responsibilities of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Under the current draft, the CFTC would take primary responsibility for regulating most digital asset trading, while the SEC would retain oversight of securities tokens. Critics, however, believe this approach could narrow the SEC’s authority and create regulatory blind spots.
Several state officials share Galvin’s concerns, including regulators from New York and California, who have argued that federal preemption could restrict states from addressing fraud and compliance violations within their borders. These states have traditionally led enforcement actions against unregistered crypto exchanges and token issuers.
Galvin has been a long-standing advocate for stronger financial oversight and has previously taken enforcement actions against unregistered crypto firms. He has also issued public warnings about speculative risks in digital assets, urging investors to be cautious amid the rapid expansion of unregulated crypto products.
As congressional committees continue refining the draft bill, Galvin said his office would closely monitor developments and push for stronger investor safeguards within any new federal framework. He suggested that any effective regulatory model must preserve coordination between federal and state agencies to ensure accountability and consumer protection in the evolving crypto market.
Galvin has been a long-standing advocate for stronger financial oversight and has previously taken enforcement actions against unregistered crypto firms. He has also issued public warnings about speculative risks in digital assets, urging investors to be cautious amid the rapid expansion of unregulated crypto products.
As congressional committees continue refining the draft bill, Galvin said his office would closely monitor developments and push for stronger investor safeguards within any new federal framework. He suggested that any effective regulatory model must preserve coordination between federal and state agencies to ensure accountability and consumer protection in the evolving crypto market.
Author
Sebile Fane cut her teeth in blockchain by building tiny NFT experiments with friends in her living room, long before the buzzwords took hold. She’s driven by a curiosity for the human stories behind smart contracts — whether it’s a small-town artist minting her first token or a DAO voting on climate grants — and weaves technical insight with genuine empathy.
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