Under a bill offered by New York Attorney General Letitia James, crypto exchanges could be needed to reimburse users who were the victims of fraud.
Letitia James has reportedly offered legislation that would offer the New York Attorney General’s office moreover authority to regulate the crypto industry.
In a May 5 announcement, the NY AG’s office planned to submit a bill called the Crypto Regulation, Protection, Transparency, and Oversight Act, or CRPTO, in the state’s 2023 legislative session. The offered legislation would offer New York officials the enforcement power to publish subpoenas, impose civil penalties for crypto enterprises violating state law, and shut down companies allegedly concerned with fraud or illicit activities.
Under CRPTO, exchanges would be needed to reimburse users who were the victims of fraud. It would similarly codify the term “ stablecoin ” to only apply to tokens that remained backed with 11 United States dollar reserves or “ high-quality liquid assets. ”
“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, ”told James.“ Banks and different financial services are regulated. The cryptocurrency industry must be too.”
The New York State Department of Financial Services, or NYDFS, presently has the authority to publish BitLicenses to crypto enterprises operating in the state and oversee numerous aspects of the digital asset space. James ’ bill would similarly aim to strengthen that authority.
Related: New York Assembly introduces crypto payments bill for fines, taxes
James ’ office has preliminarily taken action against crypto enterprises, alleging the company selling securities and commodities to residents without enrolling in New York. The AG similarly filed a lawsuit against Celsius founder and former CEO Alex Mashinsky in January, claiming he made numerous “ false and misleading statements ” that led to investors losing billions.
New York lawmakers would require to vote on the offered bill should it be presented. In 2022, the legislature passed a two-year moratorium on Bitcoin BTC $29,436 mining in the state despite some crypto advocates suggesting lawmakers had spun a false narrative in marketing the legislation.
(TURNER WRIGHT, Cointelegraph, 2023)