New York Attorney General Proposes ‘Strongest and Most Comprehensive’ Set of State Crypto Regulations

New York Attorney General Letitia James has proposed a new set of state crypto regulations that she says will increase transparency and enhance investor protections in the digital asset sector.

James rolled out the new 30-page piece of potential legislation in a press release on Friday, arguing that it would represent “the strongest and most comprehensive set of regulations on cryptocurrency in the nation” if passed.

The bill would implement public audit requirements for crypto exchanges and require them to publish listing standards for crypto assets.

The legislation would also aim to reduce conflict-of-interest issues in the crypto space by outlawing common ownership of crypto issuers, marketplaces, brokers, and investment advisers. It would also ban crypto brokers and marketplaces from trading for their own accounts, and it would prohibit brokers from trading customer assets.

The regulations would also require crypto platforms to reimburse customers who are the victims of fraudulent or unauthorized transfers. They would also ban the use of the word “stablecoin” to describe digital assets that aren’t backed up on a 1:1 basis by dollars or other high-quality liquid assets.

Says James,

“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. New York investors should have the peace of mind that there are safeguards in place to protect them and their money. All investments are regulated to account for every penny of investors’ money — cryptocurrency should be no exception. 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.”

James says her office will submit the bill to New York state lawmakers for consideration in the ongoing legislative session.

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