New York AG Letitia James warns crypto: ‘Play by the rules’

New York Attorney General Letitia James is warning the cryptocurrency industry to “play by the same rules as everyone else.”

In a post on the official X account on May 25, James said, “We will go after those who don’t.”

See below.

An application history

James has been in office since 2018 and has a history of cracking down on crypto companies. In 2019, the USDT stablecoin issuer launched a protracted legal battle with Tether and crypto exchange Bitfinex, resulting in a fine of $18.5 million.

It has also filed lawsuits against companies such as KuCoin and Coinseed, with the former agreeing to a $22 million settlement in December 2023.

Through these efforts, James has established his office as a powerful force in regulating the crypto industry and ensuring that players in the industry do not operate outside the boundaries of the law without facing significant repercussions.

His latest warning to crypto companies comes after his office secured a landmark $2 billion settlement with troubled crypto lender Genesis Global.

The firm, which declared Chapter 11 bankruptcy in January 2023, was ordered to return approximately $3 billion in cash and cryptocurrency to its customers as part of a court-approved liquidation. The agreement is the largest agreement ever reached between the state of New York and a crypto company.

Regulatory deficiencies

Following the settlement, James expressed frustration with the crypto industry’s regulatory shortcomings, saying: “We are once again seeing the real-world consequences and damaging losses that can occur due to the lack of oversight and regulation in the cryptocurrency industry.”

A key part of the settlement involves the creation of a victims’ fund aimed at helping defrauded investors, including 29,000 New Yorkers who invested more than $1.1 billion in Genesis through the Gemini Earn scheme.

James pursued Genesis in October 2023, claiming the company concealed significant losses from its investors. However, Genesis neither admitted nor denied these allegations as part of the terms of the settlement.

In addition, the agreement stipulates that the activities of Genesis, Gemini and Digital Currency Group in New York will be stopped.

Perhaps James’ most notorious case in recent years is the one targeting Former President and new cryptocurrency fan Donald Trump.

Remember how in March the 65-year-old watchdog won a civil fraud lawsuit against Trump, his adult sons, and the Trump Organization.

Trump was ordered to pay $454 million, including $355 million in penalties and nearly $100 million in interest.