After weeks of volatility in the cryptocurrency markets and two high-profile lawsuits involving cryptocurrency companies in New York State, New York Attorney General Laetitia James has issued the strongest warning to everyone in the industry.
In a double warning issued on March 1, James warned retailers that they face increased risk and reduced protection, both in terms of regular cryptocurrency trading and in terms of “violent and unsafe activity” by bad players taking advantage of the wide economic activity. … Anxiety and high unemployment.
When it comes to day trading and the lure of the crypto bull market in 2021, James hasn’t sounded the alarm. The announcement states that “even if you buy an established cryptocurrency on a more popular trading platform, the price could drop instantly,” emphasizing that trading cryptocurrencies is not the same as traditional stocks, bonds and other assets:
“Trading in the current market exposes investors to risks such as sharp price fluctuations, conflicts of interest between operators of trading platforms and increased opportunities for market manipulation. Moreover, even “legitimate” investments in virtual assets are vulnerable to speculative bubbles.
In the absence of large-scale, organized, centralized exchanges, James also warned that those targeted by fraudsters may “have no chance” to help the state police.
James’ warning from cryptocurrency operators followed last week’s settlement with Bitfinex and Tether after it was discovered that they had incorrectly provided the extent to which Tether (USDT) coins were collateralised. The closure of the landmark case required companies to stop serving customers in New York State and pay the state $ 18.5 million in compensation.
In mid-February, James also filed a lawsuit against crypto investment platform Coinseed, claiming that thousands of investors were defrauded for more than $ 1 million.
Since virtual currency is defined as a commodity in Martin New York law, James’ notes reminded brokers, investment advisors and trading platforms that they are required by law to register with the OTP. Otherwise, they will be prosecuted both civil and criminal, and they may be denied future behavior, compensation and compensation.
The agenda also includes a quote from a recent Justice Department statement that reflects a previous characterization of cryptocurrency trading platforms by New York City lawyers as “highly vulnerable to abuse” and protects often “fake” clients.