NYAG proposes new legislation to strengthen crypto regulation and protect investors
New York Attorney General (NYAG) Letitia James has proposed new legislation to strengthen cryptocurrency regulation in the US to help protect consumers, investors and the broader economy.
NYAG proposes new legislation to boost crypto regulation
The proposed bill, called the Crypto Regulation, Protection, Transparency, and Oversight (CRPTO) Act, contains a set of regulations designed to increase transparency, eliminate conflicts of interest and impose “common-sense measures” to protect investors, similar to the regulations imposed on other financial services.
The bill intends to stop conflicts of interest in the industry by preventing common ownership of crypto issuers, marketplaces, brokers and investment advisers, and preventing participants from engaging in more than one of those activities.
To boost transparency in the industry, the bill outlines that all companies will have to undergo compulsory independent auditing and publish their audited financial statements.
The bill will also require crypto companies to implement strong know your customer (KYC) checks and reimburse any potential victims of crypto fraud.
The legislation will also grant the NYAG with jurisdiction to enforce any violation of the law and impose civil penalties of $10,000 per violation per individual, and $100,000 per violation per firm. It will also strengthen the New York State Department of Financial Services’ (DFS) regulatory authority of digital assets.
“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,” says James.
“New York 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.
“These common-sense 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.”
The move comes amid a flurry of crypto regulation activity in the United States. Crypto exchange Bittrex announced last month that it would be shutting down operations in the US effective 30 April, saying it was “not viable” to continue operations under the current US regulatory and economic environment. The company’s US entity has since filed for bankruptcy protection.
