New York Attorney General Letitia James on Friday proposed a state law to regulate the crypto industry. It will broaden the New York State Attorney General Office’s authority over crypto firms that operate in New York.
New York regulatory actions against the crypto industry have diminished the growth of the sector in New York. After introducing the BitLicense requirement and a two-year moratorium on new permits for proof-of-work crypto mining, New York is taking further regulatory actions to vex the cryptocurrency industry.
New York Proposes Bill To Regulate Crypto
New York Attorney General Letitia James proposes the Crypto Regulation, Protection, Transparency and Oversight Act (CRPTO) bill to further tighten rules over cryptocurrency companies in the state. The bill will be submitted for consideration in the New York State Senate and Assembly legislative session starting June 8.
The bill will increase the New York Attorney General Office’s enforcement authority of cryptocurrency firms. In addition, codifying the New York State Department of Financial Services’ jurisdiction to license crypto firms and oversee the state’s digital asset licensing regime.
“Rampant fraud and dysfunction have become the hallmarks of cryptocurrency and it is time to bring law and order to the multi-billion-dollar industry. These commonsense regulations will bring more transparency and oversight to the industry and strengthen our ability to crack down on those that don’t pay respect to the law.”
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Under the CRPTO Act, crypto exchanges and firms will be required to publish audited financial statements, reimburse customers in case of fraud, keep custody of customers’ funds, and lend out or borrow customers’ funds. In case of violations, issue subpoenas and impose civil penalties of $10,000 per violation for each individual or $100,000 per violation for each crypto firm.
The cryptocurrency industry is in need of regulation and oversight. However, over-regulation and burden will restrict the growth of the innovative industry. The crypto industry had criticized New York’s BitLicense and moratorium on cryptocurrency mining.
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NYDFS Strict Crypto Regulatory Stance
The NYDFS has maintained a strict regulatory stance against the crypto market recently, bringing fines and enforcement against crypto companies.
On May 3, the New York State Department of Financial Services fined bitFlyer USA $1.2 million for violating cybersecurity regulations. In February, the regulator’s regulatory action against Paxos caused major challenges for Binance after it ordered Paxos to stop minting BUSD. Coinbase, BitPay, and Robinhood among others were also fined by the NYDFS maintaining its strict stance.
It also introduced the Adoption of Virtual Currency Assessment Regulation to collect supervisory fees from licensed cryptocurrency firms operating within the New York state.
Also Read: New York Regulator Fined Another Crypto Firm For Violating Laws
