New York AG Orders Unregistered Crypto Lenders to Cease Operations

New York Attorney General (AG) Letitia James on Monday ordered two unregistered crypto lenders to cease operations in New York while three others are being investigated. She states the new effort she is taking to protect investors and the entire trading market in the country from being exploited by high-risk cryptocurrency schemes. 

According to the AG, crypto lending platforms are generally interest-bearing accounts that promise investors a return of a certain percentage from the digital assets deposited with them. Lending companies are mandated by law to register with the Office of the Attorney General (OAG) before they can offer their services to New Yorkers. 

OAG has already mandated two crypto lenders to immediately halt their unregistered and unlawful operations in New York while demanding that three other companies provide information relating to their products and other activities.

NYAG notes that the platform issued a cease and desist order offering fixed or variable rates in reward to its investors either by trading or lending the deposited crypto assets to other users. 

Alert After New York AG Orders Two Unregistered Crypto Lenders To Cease Their Operations

Following the Martin Act, these types of lending products or services for rewards are securities by law, and operators are obligated to register with the OAG as brokers, dealers, or salespersons if they must render their products or services to New York residents.

AG James added that the office of the Attorney General is responsible for guaranteeing that innocent investors do not get played by influencers in the industry.

“We’ve already taken action against a number of crypto platforms and coins that engage in fraud or that illegally operate in New York,” she said, while promising to take whatever actions are necessary against firms that think they are above the law. 

“Cryptocurrency platforms must follow the law, just like everyone else, which is why we are now directing two crypto companies to shut down and forcing three more to answer questions immediately,” she added.

Attorney General James has been in the fight against unregistered cryptocurrency platforms. Just recently, she ordered the platform Coinseed to shut down after filing a lawsuit against the firm earlier this year.

In the same month, she had helped recover half a billion dollars unlawfully procured from investors who supported GTV Media Group Inc. The company is involved in selling illegal stocks plus virtual products promoted as crypto without being duly registered in New York State