Oct 18, 2021 - Politics & Policy

New York AG orders two unregistered crypto lenders to shut down

New York Attorney General Letitia James speaking during a press conference in New York City in August 2021.
New York Attorney General Letitia James speaking during a press conference in New York City in August. Photo: David Dee Delgado/Getty Images

New York Attorney General Letitia James on Monday ordered two unregistered cryptocurrency lending platforms to cease operating in the state within 10 days and requested three other platforms to send her office information about their activities and products.

Why it matters: Due in part to a lack of clear regulations, crypto companies have been making various moves — and finding out that not all regulators agree with them.

  • James' office argued that virtual currency lending products are considered securities under the state's Martin Act, which requires companies offering such financial services to register with the attorney general's office in order to do business with New Yorkers.

What they're saying: "Cryptocurrency platforms must follow the law, just like everyone else, which is why we are now directing two crypto companies to shut down and forcing three more to answer questions immediately,” said James said in a statement.

  • “My office is responsible for ensuring industry players do not take advantage of unsuspecting investors. We’ve already taken action against a number of crypto platforms and coins that engaged in fraud or that illegally operated in New York," she added.

Go deeper: Dueling visions of U.S. cryptocurrency regulation

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