Letitia James Takes on Crypto Firms in New York

New York Attorney General Letitia James steps up her actions against cryptocurrency companies that do not follow established regulations.

Recently, through a statement on the social network X, James emphasized that he will not hesitate to take action against entities that violate the law. “Cryptocurrency companies must follow the same rules as everyone else. We will go after those who do not,” declared the attorney general.

This warning comes after the conclusion of a significant agreement with the company Genesis, which is facing financial difficulties. Genesis agreed to pay a $2 billion fine and was banned from operating in New York state. The agreement, subject to judicial review and approval due to the company’s recent bankruptcy, also includes the creation of a fund to compensate victims of fraud. “The settlement will establish a victims’ fund to help defrauded investors, including at least 29,000 New Yorkers, who have contributed more than $1.1 billion to Genesis through the Gemini Earn investment program,” James explained.

Crypto companies must play by the same rules as everyone else.

We will go after those that don’t.https://t.co/IrvoPDSlLy

— NY AG James (@NewYorkStateAG) May 25, 2024

Genesis’ situation has been further complicated by the blocking of client funds since November 2022, when the company halted withdrawals due to liquidity issues following the collapse of cryptocurrency hedge fund Three Arrows Capital.

Additionally, in October 2023, Letitia James took legal action against Genesis, its former CEO Soichiro Moro and parent company Digital Currency Group, accusing them of trying to hide losses totaling US$1.1 billion. The investigation into Digital Currency Group began to gain prominence in August, focusing on its connections to Genesis, which was facing financial problems.

James’ initiative signals an ongoing effort to regulate the cryptocurrency market in New York, setting a precedent for legal compliance and investor protection.

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