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AG James supports stricter cryptocurrency regulations

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  • Staff Report 

Attorney General Letitia James is endorsing new legislation aimed at amending state business law to enforce tighter regulations on digital assets like cryptocurrency. The move seeks to crack down on unregistered platforms and bolster investor protections within the industry. The Crypto Regulation, Protection, Transparency, and Oversight Act would necessitate independent public audits of cryptocurrency transfers, prohibit individuals from owning related companies, and strengthen the state Department of Financial Services’ oversight and regulatory authority over digital assets.

The proposed legislation would require crypto companies to disclose their financial statements, tackle conflicts of interest within the industry, and implement safeguards for crypto investors. Furthermore, crypto platforms would be obligated to reimburse customers who fall victim to fraud. The bill seeks to increase transparency by mandating that cryptocurrency promoters register and report their interest in any issuer whose crypto assets they promote, requiring marketplaces to establish and publish listing standards, and providing investors with material information about issuers, including risk and conflict-of-interest disclosures.

If enacted, the bill would grant the state attorney general the authority to enforce the law by issuing subpoenas, imposing civil penalties, collecting restitution and damages, and shutting down fraudulent businesses. The measure would also codify the Department of Financial Services’ authority to oversee digital asset licensing and license digital asset brokers, marketplaces, and investment advisors before they can conduct business in the state. State Comptroller Thomas P. DiNapoli and state Sen. James Sanders Jr. have both expressed support for the proposed legislation, emphasizing the need for regulation and oversight in the cryptocurrency industry to protect investors and maintain transparency.