New York Attorney General Cautions on Crypto Risk

New York Attorney General Letitia James has issued several alerts pertaining to investors purchasing cryptocurrencies. The AG said that investors should exercise “extreme caution when investing in virtual currencies.”

Attorney General James also issued an alert to industry members, reminding brokers, dealers, salespersons, and investment advisors that they could potentially face “both civil and criminal liability” if they do not fulfill their obligations regarding registration with the state of New York when doing business with virtual currencies.

Attorney General James stated:

“Too often, greedy industry players take unnecessary risks with investors’ money, but, today, we’re leveling the playing field and issuing alerts to both investors and industry members across the nation. All investors should proceed with extreme caution when investing in virtual currencies. Cryptocurrencies are high-risk, unstable investments that could result in devastating losses just as quickly as they can provide gains. We will not hesitate to take action against anyone who violates the law. Two weeks ago, we filed a lawsuit to shut down Coinseed’s fraudulent operation. Last week, we ended both Bitfinex and Tether’s illegal activities in New York. And now, today, we’re sending a clear message to the entire industry that you either play by the rules or we will shut you down.”

The statement by the NY AG arrives at a time when Bitcoin has hit all-time highs only to rapidly head in the opposite direction. The AG warns about speculative bubbles, scammers, and unscrupulous industry players.

The AG said that the ability to hide one’s true identity when trading virtual currency, “many criminals use cryptocurrencies in their schemes, including for money laundering, human trafficking, blackmail, illicit financing, and tax evasion.”

The warning was joined with “five common-sense tips” for avoiding fraud.

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