Following weeks of volatility in the crypto markets and two high-profile legal cases involving crypto firms in New York state, NY Attorney General Letitia James has issued her starkest warning yet to all participants in the industry.

In a double alert published on March 1, James warned retail traders that they face heightened risks and low protection, both in terms of regular crypto trading and being potentially subject to “abusive and unsafe activity” by bad actors exploiting a period of widespread economic anxiety and high unemployment.

Regarding everyday trades and the allure of the 2021 crypto bull market, James’s alert pulled no punches. “Even if you purchase a well-established virtual currency from a more reputable trading platform, the price could crash in an instant,” the announcement notes, taking pains to stress that cryptocurrency trading is not like traditional stocks, bonds, and other assets: 

“Trading in the current market exposes investors to risks, such as wild price swings, conflicts of interest among trading platform operators, and increased chances of market manipulation. Further, even ‘legitimate’ investments in virtual assets are subject to speculative bubbles.”

Moreover, in the absence of central, comprehensively-regulated exchanges, James warned that those targeted by fraudsters may have “no recourse” to help from law enforcement in the state.

James’s alert to cryptocurrency business operators comes in the wake of last week’s settlement with Bitfinex and Tether after they were found to have misrepresented the degree to which Tether (USDT) coins were backed by fiat collateral. The conclusion of the landmark case required the firms to stop servicing customers in the state of New York and to pay $18.5 million in damages to the state.

In mid-February, moreover, James sued crypto investment platform Coinseed for allegedly defrauding thousands of investors out of more than $1 million.

Given that virtual currency is defined as a commodity under New York’s Martin Act, James’s notice reminded broker-dealers, investment advisors and trading platforms that they are required by statute to register with the Office of the Attorney General. Should they fail to do so, they will be exposed to both civil and criminal liability and could be prohibited from future conduct, as well as ordered to pay out restitution and damages.

The notice also cites a recent Department of Justice that echoed the NY Attorney General’s earlier characterization of crypto trading platforms as being “highly susceptible to abuse,” offering protections for customers that are often “illusory.”

Source: COINTELEGRAPH

Bitcoin ETFs

A Decade in the Making: US SEC Approves 11 Bitcoin ETFs, Igniting Market Enthusiasm

After years of anticipation and regulatory scrutiny, the U.S. Securities and Exchange Commission (SEC) has granted approval to 11 Bitcoin ETFs applications, marking a significant milestone in the cryptocurrency and ...
Read More
Will Bitcoin Price Increase 200% When Bitcoin ETF Is Approved?

Will Bitcoin Price Increase 200% When Bitcoin ETF Is Approved?

Everyone wants to know that bitcoin will Bitcoin Price Increase 200% When Bitcoin ETF Is Approved? We talk about the Bitcoin ETF, an important part in the cryptocurrency space. According ...
Read More

10 Must-Have Features on Bitcoin Staking Site

Crypto has provided many benefits for online gambling, and almost all relevant gambling sites now offer it as a payment method.  With so many gambling sites, players, especially those without ...
Read More
Christmas in the cryptocurrency world arrives early as the pre-holiday crypto market heats up

Christmas in the cryptocurrency world arrives early as the pre-holiday crypto market heats up

Happy Cryptomas to all of you! During the bullish state of the crypto market, margin-lending platforms and decentralised exchanges were the most often used DeFi protocols. Bitcoin is Up 167% so ...
Read More
Share with Others