New York Attorney General Says Cryptocurrency Investment is Risky

New York Attorney General Laetitia James issued a warning to cryptocurrency investors and reminded industry participants to regulate their activities.

March 2, 2021 | AtoZ Markets – New York Attorney General’s Office (NYAG) Letitia James released a statement saying investing in digital assets is “impractical” and carries “extreme risks.” According to the warning, “the underlying value of cryptoassets is highly subjective and unpredictable”, they carry “increased risk of market manipulation” and potential difficulties in cashing investments.

The warning came amid growing interest from retail investors, who are contributing significantly to the ongoing rally in Bitcoin, and growing demand from institutional investors.

“We are making it clear to the entire industry that either you play by the rules or you will be closed,” said James.

Meanwhile, Eric Turner, director of research at Messari, believes the attorney general is exaggerating the risks associated with the crypto market. He believes that such statements only “scare people.” Instead, the authorities should “educate them honestly about cryptoassets.” Today many large investors such as Microstrategy, Square, Goldman Sachs Inc are investing in bitcoin.

“The fact is that the cryptocurrency market is becoming a multi-billion dollar space and is creating high-paying jobs around the world. If New York continues to view the industry with unwarranted hostility, you will see all these opportunities pass by the state,” Turner said.

Note that the capitalization of cryptocurrencies has approached $1.5 trillion, and the capitalization of bitcoin is $906.8 billion.

Recall that in February, the New York prosecutor’s office and the SEC accused the creators of the automated application for investing in cryptocurrency Coinseed of defrauding investors and violating securities laws.

In addition, the NYC Attorney’s Office resolved a lawsuit with Bitfinex and Tether last week. The firms will pay $18.5 million in fines and will be required to provide quarterly reports on their activities.

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