“New York Attorney General Proposes Tighter Regulations for Cryptocurrency Industry to Combat Fraud and Protect Investors”

As indicated in a statement issued today, the absence of tougher regulations for this industry is what has made it prone to drastic market fluctuations, in addition to being used to hide and encourage criminal behavior and fraud.

NEW YORK.- The attorney general ofand New York, Letitia James, has presented a bill that seeks to tighten regulations in the cryptocurrency industry “to protect investors, consumers and the economy in general.”

As indicated in a statement issued today, the absence of tougher regulations for this industry is what has made it prone to drastic market fluctuations, in addition to being used to hide and encourage criminal behavior and fraud.

The regulations it proposes would increase transparency, eliminate conflicts of interest and impose measures “common sense” to protect investors, in accordance with regulations imposed on other financial services.

They will also require independent public audits of cryptocurrency exchanges and prevent people from owning the same companies, such as brokerages and tokens, to prevent conflicts of interest from arising.

Under these regulations, crypto platforms would also have responsibilities to customers similar to those of banks under the Federal Electronic Funds Transfer Law by requiring them to reimburse customers who are victims of fraud.

The bill would strengthen the digital asset regulatory authority of the State Department of Financial Services (DFS).

James recalled that millions of investors have lost hundreds of billions in value from their cryptocurrency investments due to rampant fraud, market manipulation, hacking, and non-transparent business practices.

The prosecutor explained that this industry lacks a strong regulatory regime to prevent or intercept fraud and market failures, and that although there are millions of people who have lost significant investments due to these failures, low-income investors and individuals of color have been disproportionately hurt by the risks of cryptocurrency.

Rampant fraud and dysfunction have become the hallmarks of cryptocurrency and it is time to bring law and order to this multi-billion dollar industry. Investors in New York should have peace of mind knowing that security measures are in place to protect them and their money.

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