New York Attorney General seeks to help investors deceived by crypto platforms in regulatory push

• The Office of the Attorney General (OAG) has asked New York crypto investors to reach out to them for getting deceived by crypto firms.
• This is the first major regulatory attempt after the recent crackdown in the crypto space.

The New York City regulators have initiated actions over the recent turn of events in the crypto space. On Monday, August 1, New York Attorney General Letitia James issued an alert urging local crypto investors to contact her office in case they have been deceived during the recent crypto crash.

During the second quarter of 2022, the cryptocurrency market witnessed one of the biggest crashes in its history. It majorly started with the failure of the Terra and LUNA projects draining investors’  wealth by more than $40 billion.

This followed a series of liquidations leading to a huge liquidity crisis in the market. Over-leverage players and crypto lenders like Voyager Digital and Celsius Networks stopped withdrawals by freezing customer funds. The Office of the Attorney General (OAG) is now investigating if investors have been deceived by their crypto investments by locking them out of their accounts.

The OAG is further encouraging New York residents to report this issue to them. Furthermore, they are encouraging workers in the crypto space who could have witnessed fraud and misconduct at their place. These workers can report anonymously to the OAG. Speaking on the matter, New York Attorney General Letitia James said:

The recent turbulence and significant losses in the cryptocurrency market are concerning. Investors were promised large returns on cryptocurrencies, but instead lost their hard-earned money. I urge any New Yorker who believes they were deceived by crypto platforms to contact my office, and I encourage workers in crypto companies who may have witnessed misconduct to file a whistleblower complaint.

New York’s strict crypto policy

Historically, New York has maintained a strict policy when it comes to dealing with cryptocurrencies. Previously, the office of the New York Attorney General took action against some of the popular crypto firms like Coinseed and Bitfinex. Last year in February 2021, Bitfinex had to pay $18.5-million in fine to settle a disputed case with the NYAG.

On the other hand, the New York Department of Financial Services has its own “BitLicense”. The NYDFS provides these licenses to crypto firms for operating in the Ney York jurisdictions. The license is highly selective and in 2020 only 25 companies received the license to operate in New York.

Earlier this year in June 2022, the New York Senate signed a moratorium to ban crypto mining activities in the state. The lawmakers, passed the bill to reduce the state’s carbon footprint. As a result, Ney York shall be issuing no more licenses for crypto miners to operate in the State.