The NY AG wants to tighten regulations on cryptocurrency! The top legal officer of the state of New York has recently proposed a plan to tighten regulations on cryptocurrency in the state. Through this proposal, the top legal officer of New York aims to target the NY AG crypto market in order to protect consumers from risky investments.
This proposal is one of many efforts being made to increase trust in cryptocurrency. Prior to tightening regulations, there is a need to increase transparency in the cryptocurrency market so that consumers find it easier to invest in it. Through this proposal, the top legal officer of New York wants to use a group of laws to potentially make this market impartial.
Attorney General Letitia James has presented a proposal that would establish a “first-in-the-nation” rule for crypto trading if approved by the state legislature. The proposal could reduce potential conflicts of interest, require crypto companies to publicly report financial details, and strengthen state security. The proposal also includes consumer protection laws by involving investors in the crypto industry.
James stated that the new rules would “bring greater transparency and scrutiny to the industry and strengthen our ability to crack down on those who don’t respect the law.” She explains that fraud and laxity have become the identity of cryptocurrency and it’s time to bring law and order to the multi-billion dollar industry.
In a statement, she said, “It’s time to bring law and order to the multi-billion dollar industry where fraud and laxity have become the identity of cryptocurrency. New York investors should have peace of mind that security measures are in place for their protection and the safety of their money.”
The crypto regulation, protection, transparency, and oversight act would also give the attorney general the power to issue subpoenas and civil penalties ranging from $10,000 to $100,000 for each violation and citizen sanctions.
The New York State Department of Financial Services has decided to regulate and license digital asset brokers, marketplaces, investment advisors, and crypto issuers under its jurisdiction. New York City Comptroller Brad Lander will address the urgency of more scrutiny in the crypto industry by “creating a legal framework to protect New Yorkers and the economy from predatory companies.” Lander stated that the lack of transparency in the crypto industry results in numerous investors, particularly low-income New Yorkers and people of color, suffering significant losses that bear no proportion to their investment. Therefore, the cryptocurrency industry must not be allowed to operate without a basic regulatory framework.
John Stark, founder and former director of the Internet Bureau of the Securities and Exchange Commission, stated that James’ cryptocurrency law “sets a standard for regulating the nascent cryptocurrency industry in all American states and territories.
This law brings very important inspection for the industry and raises the bar, ensuring that the security of investors is paramount,” this statement is very important in relation to the industry.
Currently, the multi-billion dollar crypto industry has become the goal of federal and state policymakers. These policymakers argue that they need strong regulations, so that it does not become a victim of the dramatic ups and downs of the market, and it is not used to conceal criminal activities and fraud, but rather to provide convenience.
Several states have plans to create equal laws for the security of investors and establish new rules for the industry. Congress members are also planning to establish federal regulations for crypto traders and companies. In December, federal prosecutors accused Samuel Bankman-Fried, the founder and former CEO of the crypto exchange FTX, of financial crimes, alleging that he defrauded customers and investors and played a significant role in the company’s multi-billion dollar downfall.
In February, the founder of a cryptocurrency company based in Las Vegas was sentenced to more than eight years in prison. He had defrauded investors of more than $7.5 million in a “Ponzi-like” scheme, according to officials.
Over the past year, this founder had targeted several cryptocurrency companies. Among them was the founder of Celsius, Alex Mashinsky, who was accused of providing misleading information that caused investors to lose billions of dollars.
An analyst said, “Many crypto firms do not meet the basic investor protection standards set by regulators for traditional finance. In addition, their business models are susceptible to conflicts of interest. A senior policy analyst said in a statement that this legislative proposal makes it clear that these firms cannot operate like perpetual businesses and must be subject to the same rules as other financial firms.
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