New York Attorney General's office may soon have more power over crypto firms operating in the state.
The New York Attorney General's office, led by Letitia James, is reportedly pushing for increased authority to regulate the crypto sector.
The office plans to propose the Crypto Regulation, Protection, Transparency, and Oversight Act (CRPTO) in the state's 2023 legislative session. The legislation aims to grant officials the ability to impose civil penalties on crypto firms violating state law, issue subpoenas, and shut down fraudulent or illicit companies.
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CRPTO would also require crypto exchanges to reimburse users who fall victim to fraud and establish a definition for "stablecoin" to include tokens backed by a 1:1 ratio of US dollar reserves or high-quality liquid assets.
Letitia James expressed concern over the widespread fraud in the cryptocurrency industry, which has resulted in significant losses for investors, particularly those with low incomes and people of color.
For too long, fraud in the cryptocurrency industry has caused investors to lose hundreds of billions, with low-income investors and people of color suffering the most. Banks and other financial services are regulated. The cryptocurrency industry must be too.
Currently, the New York State Department of Financial Services (NYDFS) has the power to issue BitLicenses to crypto firms operating within the state and oversee numerous aspects of the digital asset space. The CRPTO bill aims to fortify this authority even further.
In the past, James' office has taken action against crypto firms like KuCoin, alleging that they sold securities and commodities to residents without proper registration in New York.
Additionally, in January, the office filed a lawsuit against Celsius founder and former CEO Alex Mashinsky, accusing him of making false and misleading statements that caused investors to lose billions.
Ultimately, the fate of the proposed CRPTO bill will depend on a vote by New York lawmakers. The outcome of this vote could significantly impact the regulatory landscape for crypto companies operating in the state, potentially setting new precedents for other jurisdictions to follow.
