New York AG Letitia James Reaffirms Strict Stance Against Crypto Misconduct
New York Attorney General Letitia James is warning the cryptocurrency industry to “play by the same rules as everyone else.” In a May 25 post on her official X account, James stated, “We will go after those that don’t”.
A History of Enforcement
James has been in office since 2018 and has a history of rigorous enforcement against crypto firms. In 2019, she initiated a protracted legal battle with USDT stablecoin issuer Tether and the Bitfinex crypto exchange, resulting in an $18.5 million fine. She has also taken actions against companies like KuCoin and Coinseed, with the former agreeing to a $22 million settlement in December 2023.
Through these efforts, James established her office as a powerful force in regulating the crypto industry and ensuring that players in the sector do not operate outside the boundaries of the law without facing substantial repercussions. Her latest warning to crypto companies comes after her office secured a significant $2 billion settlement with troubled crypto lender Genesis Global.
Regulatory Shortcomings
Following the settlement, James expressed her frustration with the crypto industry’s regulatory shortcomings, stating, “Once again, we see the real-world consequences and detrimental losses that can happen because of a lack of oversight and regulation within the cryptocurrency industry”.
A significant part of the settlement includes the creation of a victims fund aimed at assisting defrauded investors, including 29,000 New Yorkers who had invested over $1.1 billion in Genesis through the Gemini Earn scheme. James pursued Genesis in October 2023, alleging that the company had concealed significant losses from its investors. However, Genesis has not admitted to nor denied these allegations under the settlement terms.
Additionally, the settlement stipulated that Genesis, Gemini, and the Digital Currency Group would cease operations in New York.
Notable Cases
James’ most notorious case in recent years is perhaps the one that targeted Ex-President and new cryptocurrency fan Donald Trump. 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, plus nearly $100 million in interest.
With a strong track record of enforcement and substantial settlements, Letitia James continues to assert her office’s commitment to holding the cryptocurrency industry accountable, ensuring it operates within the bounds of the law and protecting investors from misconduct and fraud.
