In a press release dated August 1, 2022, New York Attorney General Letitia James issued an investor warning urging New Yorkers deceived or affected by the cryptocurrency crash to contact her office.
A statement from the New York Attorney General said, “The recent turmoil and significant losses in the cryptocurrency market are worrying,” said Attorney General James. “Investors were promised high returns on cryptocurrencies but instead lost their hard-earned money. I urge any New Yorker who believes they have been deceived by crypto platforms to contact my office, and I encourage employees of crypto companies who may have observed wrongdoing to file a whistleblower complaint.”
This isn’t the first time Attorney General Letitia James has reminded New Yorkers of the risks of investing in cryptocurrencies. She has also repeatedly called for regulation of the crypto industry.
In June 2022, the New York Attorney General issued an investor warning to New Yorkers about cryptocurrency investments. “Investors keep losing billions because of risky investments in cryptocurrencies. Even well-known virtual currencies from reputable trading platforms can still crash, and investors can lose billions in the blink of an eye. All too often, cryptocurrency investing causes more pain than gain for investors. I urge New Yorkers to exercise caution before investing their hard-earned cash in risky cryptocurrency investments that may bring more fear than fortune.”
In March 2022, James released a note to taxpayers reminding crypto investors to accurately declare and pay taxes on their virtual investments to avoid penalties. The statement read, “Crypto investors, like working families and everyone else, have to pay taxes.”
James further stated that: “Cryptocurrencies may be new, but the law is clear: investors must correctly report their virtual investments and pay taxes. My office strives to hold cryptocurrency tax evaders accountable. Paying taxes on crypto transactions is not optional, and investors who dodge the law could face severe consequences. I encourage all crypto investors to follow the guidance of the IRS and the New York State Department of Taxation and Finance to ensure their filings are accurate. Don’t dodge the law, pay your taxes.”
In early October 2021, James ordered unregistered crypto lending platforms to cease operations in New York. James said: “Cryptocurrency platforms, like everyone else, must abide by the law, which is why we are now ordering two crypto companies to shut down and forcing three others to answer questions immediately.”
James further said: “My office is responsible for making sure industry players don’t take advantage of unsuspecting investors. We have already taken action against a number of crypto platforms and coins that have engaged in fraud or operated illegally in New York. Today’s actions build on that work and send the message that we will not hesitate to take any action necessary against any company that believes we are above the law.”
As federal efforts toward crypto regulation continue, some U.S. states are already taking steps to ensure compliance by stakeholders in the crypto space and to continue to educate and advise the public on matters related to crypto assets.