TL;DR Breakdown
- New York Attorney General wants to crackdown on unregistered crypto lenders.
- Crypto firms in New York battle tough regulation.
Letitia James, the New York Attorney General (AG), has called for a crackdown on unregistered crypto lenders in the state and make them law-abiding.
The Attorney General made the announcement on Monday ordering the shutdown of an unidentified group of crypto lenders in New York City. Per a press release, these crypto platforms are act in contravention of the stipulations of General Business Law § 352 et seq —better known as the “Martin Act.”
Ms. James is of the opinion that crypto lenders are in a business of making profit. Hence, they must register with the Office of the Attorney General (OAG) to operate in New York legitimately.
Five crypto lenders targeted,firms not above the law – AG
The Attorney General did not reveal the particular crypto lenders in question. However, the press statement notes that Ms. James issued five notifications to a number of platforms operating in New York.
Two firms were served a cease and desist order, while the other three were asked to provide further information before any further action is taken.
The Attorney asked the cryptocurrency businesses for user/client names, user IDs, date, time, IP addresses, and any other captured information of any client that could connect from New York. She inquired also for data of unverified users and breakdown of KYC procedures, legal documents, among other things. In her comment, she said crypto lenders must follow the law just like every other person.
Cryptocurrency lenders continue to struggle in US
Cryptocurrency lending service providers have not had a good year in the US so far, with top firms like Coinbase also being unable to keep up with cryptocurrency lending services that aimed to outperform high-yield accounts offered by traditional banks.
Others like Blockfi, Celsius have also been told to shut down in other states in the US. Although New York is a haven for finance-related businesses, its legal framework and relationship with crypto firms remain hostile.
