After weeks of volatility in the cryptocurrency markets and two high-profile legal cases involving crypto companies in New York State, New York Attorney General Letitia James has issued her stern warning to all sector participants.

In a double alert released on Monday, James warned retailers that they face increased risk and reduced protection, both in terms of regular cryptocurrency trading and potential exposure to “abusive activity and dangerous “from unsavory players who are taking advantage of a period of general economic anxiety and rising rates. Unemployment.

In terms of day trading and the lure of the 2021 crypto bull market, James’ alert has failed. The ad states that “even if you buy an established cryptocurrency on a more popular trading platform, the price can collapse in an instant”, making an effort so that cryptocurrency trading is not not the same as stocks, bonds and other assets. traditional:

“Trading in today’s market exposes investors to risks, such as extreme price fluctuations, conflicts of interest between operators of trading platforms and greater opportunities for market manipulation. In addition, even “legitimate” investments in virtual assets are subject to speculative bubbles.

Further, in the absence of central and comprehensively regulated exchanges, James warned that those targeted by crooks may “have no recourse” to assist law enforcement in the country.

James’ alert to crypto traders follows last week’s deal with Bitfinex and Tether after it was found to have distorted the support score for Tether coins (USDT) with paper collateral. Ending this landmark case forced companies to stop serving New York State customers and pay $ 18.5 million in damages to the state.

Additionally, in mid-February, James filed a lawsuit against crypto investment platform Coinseed, claiming that thousands of investors had been swindled over $ 1 million.

Since digital currency is defined as a commodity under New York’s Martin Law, James’ advice reminded brokers, traders, investment advisers and trading platforms that they are required by the law to register with the OTP. Failure to do so will result in civil and criminal liability and may be barred from performing in the future, in addition to ordering them to pay compensation and damages.

The notice also cites a recent Justice Department alert that echoes a former New York attorney’s description that cryptocurrency trading platforms are “very vulnerable to abuse,” offering protection to often “false” customers. .

Source: CoinTelegraph

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