New York vies to steer method on cryptocurrency regulation

The Crypto Regulation, Safety, Transparency, and Oversight Act would “bring law and order” to the trade by granting new authority to the New York State Division of Monetary Companies (NYDFS) to manage cryptocurrency property and exchanges, James mentioned in a press release.

“Millions of investors have lost hundreds of billions in the value of their cryptocurrency investments because of rampant fraud, including market manipulation, hacking, and opaque business practices,” the discharge mentioned.

The bill would require extra transparency from cryptocurrency platforms, make sure conflicts of curiosity unlawful, and take different steps to deliver the trade into line with how different monetary establishments are regulated. It will mandate third-party, public audits of cryptocurrency platforms and would prohibit somebody from proudly owning each a cryptocurrency platform and the tokens that commerce there.

Cryptocurrency exchanges must reimburse clients in some instances of fraud, just like necessities on banks beneath the federal Digital Fund Switch Act.

The invoice have to be authorized by the Democrat-led Home and Senate and signed by Gov. Kathy Hochul earlier than the legislative session concludes in 2024 to develop into legislation.

Federal companies, together with the Securities and Change Fee and Commodity Futures Buying and selling Fee, have debated learn how to regulate the cryptocurrency trade within the absence of any complete legal guidelines on the books by Congress.

The New York laws follows a barrage of authorized actions by James to crack down on what she considers “rampant fraud and dysfunction” within the cryptocurrency trade. Most lately, in March, her workplace filed a lawsuit in opposition to KuCoin for failing to register as a securities and commodities dealer and took comparable motion in February in opposition to CoinEx.

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

At present, the NYDFS licenses and examines cryptocurrency companies. In January, Coinbase agreed to pay $100 million as a part of a settlement with the regulator addressing allegations it violated the Financial institution Secrecy Act/anti-money laundering legal guidelines.

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