New York Attorney General Letitia James has taken a significant step in her ongoing crackdown on the cryptocurrency industry by introducing proposed legislation that would require companies to reimburse customers who fall victim to fraudulent activities. In a Twitter announcement, James stated that her office is presenting groundbreaking legislation to tighten regulations on the cryptocurrency sector. She emphasized that the industry’s history of fraud has resulted in substantial losses for investors, disproportionately affecting low-income individuals and people of color.
This new bill represents the latest effort by James’ office to enhance oversight of cryptocurrency firms. Earlier this year, she filed lawsuits against crypto exchanges CoinEx and KuCoin, as well as former Celsius CEO Alex Mashinsky. Additionally, the attorney general issued a call for crypto whistleblowers last summer.
New York already has one of the most rigorous regulatory frameworks for crypto companies in the United States through its BitLicense, which is overseen by the New York Department of Financial Services (NYDFS). James seeks to introduce common-sense measures aimed at protecting investors and eradicating the fraudulent practices that have plagued the cryptocurrency industry. She highlighted the existing regulation of banks and other financial services, asserting that the cryptocurrency sector must also face similar scrutiny.
If passed, this legislation would impose greater accountability and consumer protection within the crypto industry in New York. By requiring companies to compensate fraud victims, the proposed measures aim to address the recurring issue of fraudulent activities and bolster investor confidence in the cryptocurrency market.
