New York AG Seeks Authority to Regulate Crypto Firms, Protect Investors

• New York Attorney General Letitia James has proposed legislation to give the state’s AG office more authority over crypto firms.
• The Crypto Regulation, Protection, Transparency and Oversight Act (CRPTO) would allow for subpoenas, civil penalties for violations of state law, reimbursement for victims of fraud, and codifying the term “stablecoin”.
• This bill aims to protect investors from fraud and dysfunction in the cryptocurrency industry.

New York Attorney General Proposes Crypto Regulation Bill

New York Attorney General Letitia James has proposed new legislation that would give the state’s AG office more authority over crypto firms. The proposed bill is known as the Crypto Regulation, Protection, Transparency and Oversight Act (CRPTO).

Authority Under CRPTO

Under this bill, New York officials will have the authority to issue subpoenas on crypto firms operating in the state along with imposing civil penalties for any violations of state law. Additionally, exchanges will be required to reimburse users who are victims of fraud under this act. Moreover, it will codify the term ‘stablecoin’ to only apply to tokens backed with 1:1 US dollar reserves or “high-quality liquid assets”.

Purpose Behind CRPTO

The purpose behind this regulation is to protect investors from fraud and abuse in the cryptocurrency industry which have become common hallmarks in recent years. This bill also seeks to strengthen current regulations by NYDFS which issues BitLicenses to crypto firms operating in New York.

Previous Actions by NY AG’s Office

The NY AG’s office has already taken action against crypto firms including KuCoin which allegedly sold securities and commodities without registering in New York and Celsius whose former CEO was accused of making false claims leading investors losing billions.

Conclusion

In conclusion, this proposed regulation looks set to bring much needed protection for investors while providing a legal framework for crypto exchanges operating within New York State.