A new measure with stricter regulations to prevent crypto fraud was unveiled yesterday by New York’s attorney general.
To tackle the fraud and dysfunction that have become hallmarks of crypto, New York’s Attorney General announced stricter actions on 5 May, a move that is anticipated to focus national attention on the multibillion-dollar crypto economy.
The measure has been called “one of the strongest ever introduced” because of its emphasis on fraud trends in a sector that is mostly unregulated by the federal government and may cost consumers hundreds of millions of dollars annually.
A statement by Attorney General Letitia James: “Investors should feel confident knowing that measures have been taken to protect their funds. Cryptocurrency should be regulated the same way all other assets are so that every dollar invested can be tracked.
The most recent proposed legislation would mandate crypto exchanges compensate fraud victims. The policy mandates disclosure from businesses in an effort to increase openness within the sector.
Furthermore, markets would be required to provide relevant information to investors about issuers, such as risk and conflict of interest information. Anyone wishing to market a cryptocurrency on behalf of an issuer must first register and reveal any affiliation with that issuer. Additionally, cryptocurrency exchanges would be required to create and publish listing standards.
James claims the bill would safeguard investors from fraud, make markets more open, and eliminate conflicts of interest.
James’s office has previously gone after crypto companies like KuCoin, which she claims were operating unlawfully in New York. She also filed a lawsuit against Alex Mashinsky, the developer of Celsius, in January, claiming that investors lost billions of dollars due to misinformation.
The Attorney General concluded by saying that the absence of strong controls in this multibillion-dollar business makes it very vulnerable to market volatility. She confirmed that the regulations allowed for the concealment and facilitation of fraudulent activity.
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