Letitia James seeks crypto firm authority

According to reports, Letitia James has proposed legislation that would grant the New York Attorney General’s office more authority to regulate the cryptocurrency industry.

The New York Attorney General’s office announced on May 5 that it would introduce the Crypto Regulation, Protection, Transparency, and Oversight Act, or CRPTO, during the 2023 legislative session.

The proposed legislation would give New York officials the authority to issue subpoenas, impose civil penalties on crypto firms that violate state law, and close down firms suspected of fraud or illegal activity.

Under CRPTO, exchanges would be required to reimburse victims of fraud. Additionally, it would restrict the term “stablecoin” to only apply to tokens supported by 1:1 US dollar reserves or “high-quality liquid assets.”

“For far 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,” said James.

The regulation of banks and other financial services “The cryptocurrency industry must follow suit.”

Currently, the New York State Department of Financial Services (NYDFS) has the authority to issue BitLicenses to crypto firms operating in the state and to supervise numerous aspects of the digital asset industry.

The bill proposed by James would also seek to bolster this authority.

The office of James has previously taken action against crypto firms, including KuCoin, alleging that the firm sold securities and commodities to New York residents without registering.

In January, the Attorney General also filed a lawsuit against Celsius founder and former CEO Alex Mashinsky, alleging that he made numerous “false and misleading statements” that caused billions to be lost by investors.

If introduced, the proposed legislation would be subject to a vote by New York legislators.

In 2022, the legislature enacted a two-year ban on Bitcoin mining in the state, despite claims by some crypto advocates that the marketing of the legislation was deceptive.