Regulation
New York AG Letitia James Warns About Cryptocurrencies: ‘Play by the Rules’
New York Attorney General Letitia James warns the cryptocurrency industry to “play by the same rules as everyone else.”
In a May 25 post on his official X account, James said, “We will go after those who don’t.”
Look down.
A history of application
James has been in office since 2018 and has a history of cracking down on crypto firms. In 2019, he engaged in a lengthy legal battle with USDT stablecoin issuer Tether and cryptocurrency exchange Bitfinex, which resulted in a fine of $18.5 million.
It has also taken actions against companies such as KuCoin and Coinseed, with the former agreeing to a $22 million liquidation in December 2023.
Through these efforts, James has made his office a powerful force in regulating the cryptocurrency industry and ensuring that industry players do not operate outside the confines of the law without facing substantial repercussions.
His latest warning to crypto firms comes after his office secured a significant sum of $2 billion settlement with troubled cryptocurrency lender Genesis Global.
The company, which declared Due to file for Chapter 11 bankruptcy in January 2023, it has now been ordered to return approximately $3 billion in cash and cryptocurrency to its customers as part of a court-approved liquidation. The deal marked the largest ever between the state of New York and a cryptocurrency company.
Regulatory shortcomings
Following the settlement, James expressed his frustration with the cryptocurrency industry’s regulatory shortcomings, stating: “Once again, we see the real-world consequences and harmful losses that can occur due to the lack of oversight and regulation across the board.” inside the cryptocurrency industry”.
A significant part of the settlement includes the creation of a victims’ fund aimed at assisting defrauded investors, including 29,000 New Yorkers who had invested more than $1.1 billion in Genesis through the Gemini Earn program.
James prosecuted Genesis in October 2023, alleging that the company had hidden significant losses from its investors. However, Genesis neither admitted nor denied these allegations under the terms of the settlement.
Additionally, the agreement stipulated that Genesis, Gemini and Digital Currency Group would cease operations in New York.
James’s best-known case in recent years is perhaps the one that targeted the former president and new cryptocurrency fan Donald Trump.
Recall in March how the 65-year-old watchdog won a civil fraud lawsuit against Trump, his adult children and the Trump Organization.
Trump was ordered to pay $454 million, including $355 million in penalties, plus nearly $100 million in interest.