The New York Attorney General’s Office should be given sweeping powers to regulate the cryptocurrency industry. Such a proposal is contained in the bill of the head of department Letitia James.
Today, my office is introducing nation-leading legislation to tighten regulations on the cryptocurrency industry.
We’re proposing commonsense measures to protect investors and end the fraud and dysfunction that have become the hallmarks of cryptocurrency.
— NY AG James (@NewYorkStateAG) May 5, 2023
“[…] We offer reasonable measures to protect investors and stop the scams and dysfunctions that have become the hallmarks of cryptocurrencies,” James wrote.
The document, titled The Cryptocurrency Regulation, Protection, Transparency, and Oversight Act (CRPTO), will be presented to the Senate and State Assembly in the 2023 legislative session, which will last until June 8, according to Wall Street Journal.
The regulations require cryptocurrency exchanges to conduct an independent public audit and to provide damages to customers affected by fraud. The CRPTO is intended to limit conflicts of interest in the industry and prohibits the use of the term “stablecoin” for assets that are not 1:1 pegged to the US dollar.
In addition, the bill gives the State Department of Financial Services (NYDFS) the authority to license industry participants.
Earlier, the NYDFS launched an investigation into the Gemini bitcoin exchange due to statements regarding the safety of customer assets. In February, the regulator took notice of Binance USD (BUSD) issuer Paxos and ordered the firm to stop issuing the stablecoin.
In the same month, the Department announced an update to the tools for monitoring illegal activities with digital assets among regulated entities.
In March, the New York State Attorney General’s Office filed a lawsuit against KuCoin. A cryptocurrency exchange has been accused of violating securities laws by offering tokens without a license.
Recall that in February, the NYDFS and the US Securities and Exchange Commission opposed the purchase of Voyager Digital assets by the American division of Binance. The US Treasury took a similar position.
Later authorities withdrew their objectionsbut the exchange terminated the deal due to “a hostile and uncertain regulatory climate in the US.”
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