New York Proposes Strongest and Most Comprehensive Cryptocurrency Regulations in the Nation

“This is a positive move towards greater transparency and accountability”

The regulation of cryptocurrencies could take a step forward soon in the Empire State, as lawmakers consider new rules proposed by New York Attorney General Letitia James. The goal is to make the nascent industry a little more like Wall Streetat least in terms of supervision.

The state has already built a reputation for having a strong compliance framework under the Department of New York State Financial Services (DFS)which has regulated cryptocurrency companies under its regime of BitLicense since 2015.

Legislation proposed by James would further strengthen the authority of the DFS, said the New York State Attorney General’s Office in a press release, presenting rules focused on conflicts of interest, transparency and investor protection.

“The multi-billion dollar industry lacks strong regulations,” he said, adding that the proposal presents “the strongest and most comprehensive set of regulations on cryptocurrencies in the nation”.

A difficult situation for crypto

The proposal comes amid increased national regulatory scrutiny and follows a turbulent year for the industry, defined by several high-profile bankruptcies and thousands of investor burnouts.

The office criticized the conduct of several companies such as the defunct cryptocurrency lender Celsius y Terraform Labs as examples of behavior that would be illegal.

The OAG said it will introduce the bill, the Cryptocurrency Regulation, Protection, Transparency and Supervision Law, or CRPTO Actto state legislators for consideration during the 2023 legislative session, which ends June 8.

The bill builds on regulations that already exist in traditional finance, which could be considered remarkable in terms of legitimizing the digital asset space, Hashflow General Counsel Rahsan Boykin told Decrypt.

“This is a positive move towards greater transparency and accountability,” he said. “The new legislation…aims to impose the same rules on cryptocurrency companies that many current participants in the security industry must abide by.”

However, Boykin noted that state-by-state regulation has the potential to backfire, pushing companies out of heavily regulated areas or creating an “uneven playing field” for those that stay.

YOU MAY ALSO BE INTERESTED: Banking crisis and the rise of cryptocurrencies