New York AG Proposes Bill That Will Force Crypto Firms to Repay Fraud Victims

United States

To further tighten crypto regulation, State of New York Attorney General Letitia James on Friday introduced a bill that would impose reimbursement on exchanges whose customers are victims of fraud. 

In a tweet, AG James stated that the new bill would help curb fraud in the crypto space, which has seen investors and people of color lose hundreds of billions.

“Today, my office is introducing nation-leading legislation to tighten regulations on the cryptocurrency industry. We’re proposing commonsense measures to prevent investors and end the fraud and dysfunction that have become the hallmarks of cryptocurrency,” AG James tweeted.

Stricter Regulations in New York

The new legislation would feature a whole new set of requirements for crypto firms in the state. A part of the proposal requires crypto firms to pay back funds their customers lost to fraud.

The attorney general cited that the move would place crypto firms in the same cadre as banks, which are liable for customer reimbursements in fraud cases. AG James also proposed a shutdown for companies that fail to comply with the provisions of the intended law.

James has established herself as one of the frontrunners of crypto regulations in the US. Having filed a lawsuit against KuCoin earlier this year, James’s office has ensured that New York is one of the states with the toughest crypto regulations in America.

Bill to Stop Firms From Lending out Investor Funds

The new legislation seeks to prevent crypto companies from borrowing or lending out customers’ funds. Owing to this, the businesses of crypto lenders based in the state would be hampered as some would lack funds to continue operations.

James also looks to prevent crypto asset creators from owning platforms and force independent and public auditing of exchanges. Among other things, the attorney general proposed that her office gets the authority to impose these laws on digital currency service providers in New York.

The attorney general maintained that these regulations would distinguish New York and further uphold its legacy as “a top financial leader to protect investors and the economy.”

Your crypto deserves the best security. Get a Ledger hardware wallet for just $79!

Market Analysis
Liked Reading? Share with Friends