New York State Attorney General’s Office to crypto industry

4.3.2021 | 09:31

New York State Attorney General’s Office to crypto industry: „Either play by the rules or we’ll shut you down“

Letitia James said she wanted to send a clear message to the entire crypto industry

New York Attorney General Letitia James is advising people in the crypto industry and investors to remain vigilant and not engage in or become victims of illegal activity.

According to the New York Attorney General’s Office, James issued a warning to Profit Secret crypto investors today, urging them to exercise „extreme caution when investing in virtual currencies“. She described cryptocurrencies as „high-risk, unstable investments that can lead to devastating losses“.

In her memo, James warned people in the industry that the Attorney General’s Office would crack down on companies that skirt the law

She said her office had put an end to the „illegal activities of Bitfinex and Tether“ in New York. She alluded to last week’s settlement in which the companies agreed to pay the state $18.5 million in damages. As part of the settlement, the attorney general’s office wants Bitfinex and Tether to provide extensive reports on their finances. The companies will also no longer be allowed to serve customers in New York.

„Tether falsely represented that all stablecoins were at all times fully backed, one-to-one, by US dollars in the company’s reserves,“ James said. „Tether made false statements about the reserves of the „Tether“ stablecoin and about the movement of hundreds of millions of dollars between the two companies to cover up massive losses incurred by Bitfinex.“

The attorney general added:

„We will not hesitate to take action against people who break the law. […] We have a clear message for the entire industry: either you play by the rules or we’ll shut you down.“

Crypto investment platform Coinseed could be the next company to feel the regulatory wrath of prosecutors. Prosecutors filed a lawsuit against the company last month, alleging it defrauded investors of more than US$1 million and sold a token that is still unlisted after more than three years. James said she wanted to „end Coinseed’s fraud“. She is seeking repayment to investors, restitution with interest, a permanent injunction against the company and „the complete shutdown of Coinseed’s operations“.

Under current New York law, all crypto brokers, traders, sellers and investment advisers must register with the state attorney general’s investor protection bureau if they do business in the state. People who fail to comply with this requirement without an exemption will be subject to civil and criminal penalties.

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