‘Follow the rules or we’ll shut you down’

A visual representation of digital currencies.

Yuriko Nakao | fake images

New York Attorney General Letitia James sent a warning to investors and industry members about the dangers of cryptocurrencies on Monday.

“We are sending a clear message to the entire industry that either abide by the rules or we will shut it down,” he said in a press release.

James’ warning, which was directed at individual investors and members of the crypto industry, comes amid a significant start to 2021 for digital assets like bitcoin.

The cryptocurrency surged to a new all-time high above $ 58,000 earlier this month, after drawing the attention of Wall Street banks, companies like Tesla, and even the US government.

Bitcoin, which was created in 2009, has evolved from a protest against the banking system to a kind of “digital gold” that is starting to gain popularity among major investors.

Investment banks like JPMorgan and Goldman Sachs have shown interest in the asset class. Additionally, companies like Mastercard have made major moves to back cryptocurrencies. Tesla invested $ 1.5 billion in bitcoin in February.

The price of bitcoin surged more than 10% in the last 24 hours to hit $ 48,528, around 1:51 p.m. ET, according to CoinDesk. Other popular digital currencies include Ethereum and Litecoin.

James told members of the crypto industry in New York that they must be registered with the Investor Protection Office of the Attorney General’s Office.

Parties that are forced to register but do not are subject to civil and criminal enforcement, the office said in a statement.

Monday’s alert comes two weeks after the attorney general filed a lawsuit against Coinseed, a digital currency trading platform.

James alleged that Coinseed was operating a virtual currency trading business in New York, operating as an unregistered stockbroker for more than three years while collecting more than $ 1 million in assets from investors.

“We will not hesitate to take action against anyone who violates the law,” he said.

“Too often greedy industry players take unnecessary risks with investors’ money, but today we are leveling the playing field and issuing alerts to both investors and industry members across the country,” he added James.

He also told investors to be cautious when investing in cryptocurrencies.

“All investors should proceed with extreme caution when investing in virtual currencies. Cryptocurrencies are unstable, high-risk investments that could result in devastating losses as quickly as they can generate profits,” said James.

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