- New York’s attorney general announced a new bill, aiming to bring tighter rules to combat crypto fraud.
- The Crypto Regulation, Protection, Transparency and Oversight Act proposes one of the most extensive sets of cryptocurrency legislation in the country.
On 5 May, New York’s Attorney General announced tighter steps to combat the fraud and dysfunction that have become trademarks of cryptocurrency, a move that is likely to increase national attention on the multibillion-dollar crypto business.
The bill is touted to be one of the strongest ever, focusing on fraud patterns in an industry with little federal control, potentially costing customers hundreds of millions of dollars each year.
New York’s bill, called the Crypto Regulation, Protection, Transparency and Oversight Act, proposes one of the most extensive sets of cryptocurrency legislation in the country.
Attorney General Letitia James said,
“Investors should have the peace of mind that there are safeguards in place to protect them and their money. All investments are regulated to account for every penny of investors’ money − cryptocurrency should be no exception.”
Crypto bill aimed to bring transparency
If the latest bill is passed, cryptocurrency exchanges may be obliged to reimburse victims of fraud. The measure requires corporations to provide information in order to promote transparency in the industry.
Moreover, exchanges would have to give material information about issuers to investors, including risk and conflict-of-interest disclosures. Crypto promoters must register and disclose their involvement in any issuer whose crypto assets they promote. Furthermore, crypto markets would be forced to develop and disclose listing guidelines.
According to James, the legislation would promote transparency, eliminate conflicts of interest, and implement common-sense investor protection measures.
James’ agency has already pursued crypto businesses such as KuCoin, which she claims functioned illegally in New York. In January, she also sued Celsius creator Alex Mashinsky, alleging that investors lost billions owing to false information.
Lastly, the Attorney General added that the multibillion-dollar industry lacks robust rules, leaving it prone to severe market volatility. She attested that these rules helped in concealing and promoting illegal conduct and fraud.