New York Attorney General Stakes Claim on Crypto Regulation

New York Attorney General Letitia James has released what she called “the strongest and most comprehensive set of regulations on cryptocurrency in the nation.” 

What the proposed legislation would do:

• Require audits of cryptocurrency exchanges and prevent individuals from owning the same companies, such as brokerages and token generators, to stop conflicts of interest.
• Require crypto platforms to reimburse customers who are the victims of fraud.
• Define the New York State Department of Financial Services’ (DFS) regulatory authority of digital assets.

American Banker reports further: “James’ bill would also require digital asset firms to implement the kinds of ‘know your customer’ procedures already applied to banks, and ban the use of the term ‘stablecoin’ to market virtual currencies, except when the asset values maintain a one-to-one ratio to the dollar.” 

A possible complication. According to Fortune, there are some who wonder whether James’ move will create friction between her and Adrienne Harris, superintendent of New York’s DFS, which already regulates crypto firms via its BitLicense virtual currency program. 

In a statement the DFS said it was the “only prudential regulator with virtual asset-specific authority in the United States.” 

Earlier this year, James made headlines for suing crypto platforms CoinEx and KuCoin for failing to register with the state.