New York AG Letitia James warns crypto: ‘Play by the rules’

New York Attorney General Letitia James warned the cryptocurrency industry against “playing by the same rules as everyone else.”

In a May 25 post on her official X account, James stated: “We will go after those who don't.”

see below.

History of enforcement

James has been in office since 2018 and has a history of cracking down on cryptocurrency companies. In 2019, it began a protracted legal battle with USDT stablecoin issuer Tether and cryptocurrency exchange Bitfinex, resulting in an $18.5 million fine.

It has also taken action against companies such as KuCoin and Coinseed, with the former agreeing to a $22 million settlement in December 2023.

Through these efforts, James has established her office as an influential force in regulating the cryptocurrency industry and ensuring that players in the sector do not operate outside the bounds of the law without facing significant repercussions.

Her latest warning to cryptocurrency companies comes after her office secured a major $2 billion settlement with struggling cryptocurrency bank Genesis Global.

The company that Announce It has now been ordered, under Chapter 11 bankruptcy in January 2023, to return about $3 billion in cash and cryptocurrencies to its clients as part of its court-approved liquidation. The settlement represents the largest settlement ever reached between the state of New York and a cryptocurrency company.

Organizational deficiencies

Following the settlement, James expressed her frustration with the regulatory shortcomings of the cryptocurrency industry, saying: “Once again, we see the real-world consequences and harmful losses that can occur due to a lack of oversight and regulation within the cryptocurrency industry.”

Much of the settlement includes the creation of a victims' fund aimed at helping defrauded investors, including 29,000 New Yorkers who invested more than $1.1 billion in Genesis through the Gemini Earn scheme.

James went after Genesis in October 2023, alleging that the company concealed significant losses from its investors. However, Genesis neither admitted nor denied these allegations under the terms of the settlement.

Additionally, the settlement stipulates that Genesis, Gemini, and the cryptocurrency group will cease operating in New York.

Perhaps the most high-profile case involving James in recent years is the one targeting former president and new crypto fan Donald Trump.

Recall in March how the 65-year-old watchdog won a civil fraud suit against Trump, his adult children, and the Trump Organization.

Trump was ordered to pay $454 million, including $355 million in fines, plus nearly $100 million in interest.

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