New York AG warns cryptocurrency industry: ‘We will not hesitate to take action’

New York Attorney General Letitia James (D) warned the cryptocurrency industry on Monday that the state “will not hesitate to take action” against any illegal or unethical trading.

James issued a scathing alert warning crypto industry members that they could face “both civil and criminal liability” if they do not register with the Office of the Attorney General’s Investor Protection Bureau as required.   

“We’re sending a clear message to the entire industry that you either play by the rules or we will shut you down,” she said in a statement.

The New York attorney general said those working in the industry who know about illegal trading of cryptocurrencies should submit a file through the office’s whistleblower portal.  

Cryptocurrencies have experienced a solid financial start to the year, with the largest, bitcoin, reaching more than $58,000 earlier this month, according to CNBC. Bitcoin, which was developed in 2009, had already quadrupled in value last year, according to Bloomberg News. 

James also gave an alert for investors in virtual currencies, encouraging them to use “extreme caution,” as the recent financial success of these currencies “promises the lure of unrealistic returns and has opened the door for con artists and cheats.”

“Their underlying value is highly subjective and unpredictable,” she said in the alert. “As a result, prices can swing wildly upward and crash without warning or any change in the real economy.”

Two weeks ago, the New York attorney general filed a lawsuit against Coinseed, alleging it ran as an unregistered broker-dealer for more than three years while gathering more than $1 million from investors. 

The office also reached an agreement with crypto exchange Bitfinex and its affiliated stablecoin Tether, including for them to pay a $18.5 million fine and stop trading with New York residents.