In a press release dated August 1, 2022, New York Attorney General Letitia James issued an investor alert calling upon New Yorkers who have been deceived or affected by the cryptocurrency crash to contact her office.
A statement from the NY Attorney General read: “The recent turbulence and significant losses in the cryptocurrency market are concerning,” said Attorney General James. “Investors were promised large returns on cryptocurrencies, but instead lost their hard-earned money. I urge any New Yorker who believes they were deceived by crypto platforms to contact my office, and I encourage workers in crypto companies who may have witnessed misconduct to file a whistleblower complaint.”
This is not the first time that Attorney General Letitia James has reminded New Yorkers about 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 alert to New Yorkers about cryptocurrency investments. “Over and over again, investors are losing billions because of risky cryptocurrency investments. Even well-known virtual currencies from reputable trading platforms can still crash, and investors can lose billions in the blink of an eye. Too often, cryptocurrency investments create more pain than gain for investors. I urge New Yorkers to be cautious before putting their hard-earned money in risky cryptocurrency investments that can yield more anxiety than fortune.”
In March 2022, James released a taxpayer notice reminding crypto investors to accurately declare and pay taxes on their virtual investments to avoid penalties. The statement read: “Crypto investors, just like working families and everyone else, must pay taxes”.
James further stated that: “Cryptocurrencies may be new, but the law is clear: Investors must accurately report and pay taxes on their virtual investments. My office is committed to holding cryptocurrency tax cheats accountable. Paying taxes on crypto transactions is not optional, and investors who skirt the law can face serious consequences. I encourage all crypto investors to follow guidance from the IRS and the New York State Department of Taxation and Finance to make sure their filings are accurate. Don’t evade the law, pay your taxes.”
Earlier in October 2021, James directed unregistered crypto lending platforms to cease operations in New York. James said: “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”.
James further said that: “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. Today’s actions build on that work and send a message that we will not hesitate to take whatever actions are necessary against any company that thinks they are above the law.”
As federal efforts continue for crypto regulation, some US states are already taking measures to ensure compliance of players within the crypto space and continue to educate and advise the public on the matters relating to crypto assets.