‘Play by the rules or we will shut you down,’ says NY AG to crypto industry

New York Attorney General Letitia James is recommending members of the crypto industry and financiers to remain alert versus taking part in or ending up being a victim of prohibited activities. 

According to the New York Attorney General’s workplace, James provided an alert to crypto financiers today cautioning them to workout “extreme caution when investing in virtual currencies.” She referred to cryptocurrencies as “high-risk, unstable investments that could result in devastating losses.”

James’ message consisted of a caution to industry gamers that the AG would come down hard on companies skirting the law. She stated that her workplace had “ended both Bitfinex and Tether’s illegal activities” in New York, a referral to the business concurring to pay the state $18.5 million in damages recently. As part of the settlement, the AG’s workplace will need Bitfinex and Tether to offer comprehensive reports on its financial resources and stop serving consumers in New York.

“In the case of Tether, the company falsely represented that each of its stablecoins were fully backed, one-to-one, by U.S. dollars in reserve at all times,” stated James. “Tether made false statements about the backing of the ‘tether’ stablecoin, and about the movement of hundreds of millions of dollars between the two companies to cover up the truth about massive losses by Bitfinex.”

The Attorney General included:

“We will not hesitate to take action against anyone who violates the law […] We’re sending a clear message to the entire industry that you either play by the rules or we will shut you down.”

Crypto financial investment platform Coinseed might be the next to face the AG’s regulative rage. The workplace submitted a claim versus the company last month for supposedly defrauding financiers out of more than $1 million and offering a token that stays unlisted after more than 3 years. James stated she intends to “shut down Coinseed’s fraudulent operation” by looking for restitution for financiers, disgorgement with interest, irreversible injunctions versus the company, and “the full closure of Coinseed’s business operations.”

Under present NY law, all crypto brokers, dealerships, sales representatives, and financial investment consultants should sign up with the AG’s Investor Protection Bureau if they are doing organization in the state. Those without an exemption who stop working to do so are subject to civil and criminal charges.