Crypto Firms in New York Will Be Forced to Refund Fraud Victims with New Legislation

New York Attorney General Letitia James escalated on Friday her office’s crackdown on the crypto industry by proposing legislation that would require companies to reimburse customers who have been victimized by fraud.

James tweeted:

“My office is introducing nation-leading legislation to tighten regulations on the cryptocurrency industry. For too long, fraud in the cryptocurrency industry has caused investors to lose hundreds of billions, with low-income investors and people of color suffering the most.”

The bill would be a continuation of her office’s attempts to increase its oversight of crypto firms. She has already sued crypto exchanges CoinEx and KuCoin, as well as former Celsius CEO Alex Mashinsky, and called for crypto whistleblowers last summer.

New York already has the strictest regulations for crypto companies in the US with its BitLicense, which is overseen by the NYDFS.

James remarked:

“We’re proposing commonsense measures to protect investors and end the fraud and dysfunction that have become the hallmarks of cryptocurrency. Banks and other financial services are regulated. The cryptocurrency industry must be too.”