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NY Attorney General Considers 5 Crypto Companies, Charges 2 Lending Platforms To Shut Down

New York Attorney General (NYAG) Letitia James reveals her new efforts to track down on cryptocurrency companies without registrations.

More so, lending platforms must register with the Office of the Attorney General (OAG) in New York. Of course, this is to allow them function in the state or offer products to its residents.

Notably, The announcement details:

“Today, Attorney General James directs two of these lending platforms to immediately…”
“cease their unregistered and unlawful activities in New York and directed three other platforms…”
“to immediately provide information about their activities and products.”

Furthermore, The notice explains that crypto lending platforms
“are essentially interest-bearing accounts that offer investors a rate…”
“of return on virtual currencies that are deposited with them.”

So, Attorney General Under the Martin Act,

“The nature and function of the most common virtual currency lending products…”
“or services demonstrate that they fall squarely within any of several categories of ‘security.’”

Additionally, The U.S. Securities and Exchange Commission considers lending products as securities. Accordingly, SEC Chairman Gary Gensler says that cryptocurrency exchange Coinbase that its Lend products are securities.

More so, The NY Attorney General website releases cease and desist letters to the two lending platforms.
So, the file names shows that they are for Nexo and Celsius Network. Also, Three other firms receives a letter asking for information about their activities.

Then, Nexo tweet after the news,

“Nexo is not offering its Earn Product & Exchange in New York,..”
“so it makes little sense to be receiving a C&D for something we are not…”
“offering in NY anyway. But we will engage with the NY AG as this is a…”
“clear case of mixing up the letter’s recipients. We use IP-based geoblocking.”

Consequently, Attorney General James gives more emphasis,

“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.”

Lastly, Attorney General James shut down the cryptocurrency trading platform Coinseed. Of course, this is after filing a lawsuit against the company earlier this year.

Meanwhile In February, she makes agreement with Bitfinex, Tether, and other entities, ends their trading activity in the state of New York. Then, imposed an $18.5 million penalty on the companies.

Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Crypto is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Crypto market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.