Former Coinbase Lawyer Takes on NY AG: A Look at the "Crypto Lawfare" Challenge

Khurram Dara, a former lawyer from Coinbase, is running for the position of New York Attorney General in 2026, challenging current AG Letitia James. His campaign focuses on ending what he perceives as the misuse of legal actions—termed "lawfare"—against the cryptocurrency sector. By proposing a shift in the regulatory landscape, Dara aims to attract businesses back to New York and reduce financial burdens on residents.

Key Takeaways

Khurram Dara is campaigning for the New York Attorney General position, aiming to replace Democrat Letitia James.
He criticizes James's enforcement actions against crypto companies, claiming they harm innovation and drive businesses away.
Dara plans to reform the Martin Act and eliminate certain contingency-fee legal arrangements to decrease legal aggressiveness against businesses.
Emerging political support for Dara indicates a shifting attitude towards crypto regulation in New York as the 2026 elections approach.

Former Coinbase Lawyer Challenges NY AG Over "Crypto Lawfare" — Can He Win?

Dara's Campaign Against "Lawfare"

Khurram Dara, aged 36, has recently launched his campaign for the Republican nomination for New York Attorney General, challenging the incumbent, Letitia James. Dara's central message revolves around addressing what he terms "lawfare," which refers to the use of legal processes as political weapons, particularly in the context of cryptocurrency regulation.

Criticism of Current Crypto Regulations

Dara has been vocal about his concerns since August, often criticizing James's regulatory approach as detrimental to innovation and the overall business environment in New York. He believes that the state's stringent regulations have forced companies and investments to relocate, resulting in increased costs for residents.

“I’ve experienced the impact of lawfare firsthand,” Dara remarked in a recent interview. “It raises the costs for businesses, diminishes trust in the government, and exacerbates affordability issues for New Yorkers already facing financial strain.”

Dara’s background in the crypto regulatory sphere is robust. Until July, he served as a regulatory and policy principal at Bain Capital Crypto, following roles at Fluidity and AirSwap. He joined Coinbase in 2022 during a pivotal time for the exchange, as it was embroiled in an SEC investigation that marked the beginning of heightened regulatory scrutiny in the Biden administration.

Letitia James's Enforcement Actions

Letitia James, serving as AG since 2019, has gained national recognition through significant legal cases involving high-profile figures and entities such as Donald Trump and the NRA. A critical component of her agenda has been the enforcement of regulations on cryptocurrency. Her office has taken legal action against multiple crypto firms, including Gemini, Tether, and Digital Currency Group.

One of her notable cases in 2023 against Gemini, Genesis, and DCG led to the return of approximately $50 million to Gemini Earn users and effectively halted Genesis's lending operations in New York. Critics argue that she has overreached the boundaries of the Martin Act, a statute from the early 20th century granting broad investigative powers regarding financial misconduct.

Image of Khurram Dara Speaking

Shifting Dynamics in New York's Political Landscape

Dara’s platform proposes restricting the application of the Martin Act and ending contingency-fee arrangements with private law firms, which he claims could foster excessively aggressive legal actions and politicize enforcement decisions. His campaign touches upon larger state concerns, resonating with ideas from other local races—such as those championed by recently elected Mayor Zohran Mamdani, who focused on affordability issues.

Dara believes that curbing regulatory excess and improving oversight will aid in reducing costs for both businesses and consumers. The response from the business community has been supportive, as many leaders express hopes for a candidate who promotes a pro-business agenda.

James is anticipated to seek a third term, though she faces new challenges, including recent federal charges related to mortgage fraud, which she has contested as politically motivated. The 2026 political field is exhibiting an increase in candidates aligned with the crypto sector.

Among them is John Deaton, an attorney known for representing XRP holders in the SEC's case against Ripple, who has declared his intention to run as a Republican against Senator Ed Markey in Massachusetts after an unsuccessful bid against Elizabeth Warren in 2024.

As the political landscape evolves, it’s clear that cryptocurrency issues will be at the forefront of several races in 2026, especially in New York, a hub for Wall Street and a significant concentration of U.S. crypto firms.

To enter the primary race, Dara must secure either 25% of the vote at the GOP convention in February or gather enough petition signatures, with his only declared Republican opponent thus far being Michael Henry, the party’s nominee in 2022.