New York State Attorney General (NYAG) Letitia James is calling on the state legislature to pass legislation to regulate the cryptocurrency sector. She argues that the law sets the standard for openness and investor protection in other regions.
May 5th press releaseAG James announced legislation to impose stricter rules on the crypto sector to protect consumers, investors, and the traditional economy.
Known as the CRPTO Act, the law requires platforms to submit independent audits to cryptocurrency companies, publish their financial statements, and compensate clients who fall victim to fraud.
Suggestions for preventing runaway fraud
According to James, the cryptocurrency industry lacks rigid rules and is susceptible to fraud and rapid market changes, so it has been used to hide and enable illegal activities and fraud.
Increased transparency, elimination of conflicts of interest and enactment of common sense investor protection measures are all part of the proposed program bill, the New York AG said, creating the most comprehensive and robust set of digital asset regulations in the United States. She believes that
Additionally, the bill will stop financial fraud and conflicts of interest. Distinctive The now defunct FTX exchange. It would make it illegal for people to own cryptocurrency exchanges and for companies trading on those exchanges.
Additionally, cryptocurrency brokers are not permitted to lend or borrow customer cash, and cryptocurrency exchanges are not permitted to store customer funds.
This proposal is supported by the State Department of Financial Services (NYDFS) and the Office of the Attorney General have increased ability to regulate the cryptocurrency industry.
Under the proposal, the NYAG could issue subpoenas empowering individuals to impose civil penalties of up to $10,000 per violation and organizations up to $100,000.
Fraud, more carpet
AG James’ bill comes after several reports of fraud occurring in the crypto space. On May 4, his CultDAO-funded educational project called XIRTAM lost his 2,000 Ethereum (ETH) worth about $3.5 million to alleged lagpull.
On the same day, the WSB coin, a meme coin linked to WallStreetBets, priced at $85 after reports surfaced that one of the project’s moderators dumped more than $600,000 worth of tokens in another rug draw. % fell.
While supporting James’ proposal, New York State Senator Kevin Thomas, who heads the Consumer Protection Commission, hopes to ensure that crypto sector consumers and their investments are protected from such incidents in the future. said it does.