New York Attorney General Letitia James is proposing regulation that would compel audits and financial reporting by cryptocurrency companies in order to end the avenues for fraud and protect investors
NEW YORK (Pakistan Point News / Sputnik - 05th May, 2023) New York Attorney General Letitia James is proposing regulation that would compel audits and financial reporting by cryptocurrency companies in order to end the avenues for fraud and protect investors.
"Today, my office is introducing nation-leading legislation to tighten regulations on the cryptocurrency industry," James said via Twitter. "We're proposing commonsense measures to protect investors and end the fraud and dysfunction that have become the hallmarks of cryptocurrency."
James said she is introducing a program bill for consideration by the New York state legislature that would create new regulations for cryptocurrency companies designed to protect investors and consumers, including lower-income earners and people of color, who are allegedly the favorite target of crypto company advertisements.
"Rampant fraud and dysfunction have become the hallmarks of cryptocurrency and it is time to bring law and order to the multi-billion-dollar industry," James said in a news release.
The attorney general added that the new regulations will enable her office to further "crack down on those that don't pay respect to the law."
The legislation, known as the CRPTO Act, would require cryptocurrency companies to undergo independent auditing and publish financial statements as well as require the platforms to reimburse customers who are victims of fraud, among other measures.
The legislation would also prevent the sorts of conflicts of interest and financial wrongdoing that were the hallmark of the FTX crypto exchange's collapse last November amid claims of theft and fraud in the billions of Dollars.
Under James' proposal, individuals who own crypto exchanges would be prohibited from also owning the companies that trade on those exchanges. Crypto exchanges would be barred custody of customer funds and crypto brokers would be prohibited from lending out or borrowing from the same.
Trade journals for the crypto industry have, however, accused New York of overregulating the crypto industry, particularly with its first-of-its-kind licensing regime for digital Currency companies called the BitLicense.
Besides that regulation, a two-year moratorium on energy-intensive proof-of-work cryptocurrency mining was passed by the New York state legislature and signed by the governor last year.
Proponents of the attorney general's actions say they see more room to regulate the industry, which has experienced a string of demoralizing and destructive bankruptcies and lawsuits in the last year.
"The cryptocurrency industry is in need of regulation and oversight," New York State Comptroller Tom DiNapoli said in a statement. "As the financial capital of the world, New York must lead these efforts."
The crackdown on crypto has dragged down the price of Bitcoin, the most popular digital currency, which now trades at under $30,000 or about half its record high of nearly $70,000 in November 2021.
