New York State Attorney General Letitia James has proposed “landmark” crypto legislation that claims to be “the strongest and most comprehensive set of regulations on cryptocurrency” in the United States. “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,” said Attorney General James.
NYAG Letitia James Launches ‘Landmark’ Crypto Legislation
The New York State Attorney General (NYAG) Office announced Friday that Attorney General Letitia James has proposed “landmark legislation to tighten regulations on the cryptocurrency industry to protect investors, consumers, and the broader economy.” The announcement states:
Attorney General James’ program bill, which proposes the strongest and most comprehensive set of regulations on cryptocurrency in the nation, would increase transparency, eliminate conflicts of interest, and impose commonsense measures to protect investors, consistent with regulations imposed on other financial services.
The bill, dubbed “Crypto Regulation, Protection, Transparency, and Oversight (CRPTO) Act,” would “require independent public audits of cryptocurrency exchanges and prevent individuals from owning the same companies, such as brokerages and tokens, to stop conflicts of interest,” the announcement adds.
“Crypto platforms would also have responsibilities to customers similar to banks under the federal Electronic Fund Transfer Act by requiring platforms to reimburse customers who are the victims of fraud. The bill would also strengthen the New York State Department of Financial Services’ (DFS) regulatory authority of digital assets,” the NYAG Office detailed.
Moreover, the announcement explains that the bill would bolster investor protections by “enacting and codifying ‘know-your-customer’ [KYC] provisions” and “banning the use of the term ‘stablecoin’ to describe or market digital assets unless they are backed 1:1 with U.S. currency or high-quality liquid assets as defined in federal regulations.”
The NYAG Office continued:
The bill would grant the Attorney General jurisdiction to enforce any violation of the law, issue subpoenas, impose civil penalties of $10,000 per violation per individual or $100,000 per violation per firm, collect restitution, damages, and penalties, and shut down businesses engaging in fraud and illegality.
“The bill would also codify DFS’ authority to license digital asset brokers, marketplaces, investment advisors, and issuers prior to engaging in business in New York and allow DFS to oversee the digital asset licensing regime,” the announcement notes.
“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,” Attorney General James commented. “These commonsense regulations will bring more transparency and oversight to the industry and strengthen our ability to crack down on those that don’t pay respect to the law.”
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