New York Attorney General Letitia James has warned New Yorkers about the dangerous risks of investing in cryptocurrencies after the market hit record lows last month when investors lost hundreds of billions. The investor alert was part of her continues efforts to regulate the cryptocurrency industry and protect New York investors.
In an investor alert, the AG again urged New Yorkers to be cautious before putting their hard-earned money in risky cryptocurrency investments that can yield more anxiety than fortune. She added that even well-known virtual currencies, from the newest coins to the most well-established coins, from reputable trading platforms can still crash and investors can lose billions in the blink of an eye.
The latest warning to investors comes at a time when the New York is pursuing a ban on proof-of-work (PoW) crypto mining, with the New York State Senate having already passed the bill on Bitcoin mining moratorium in New York state due to the high amount of energy being used while mining Bitcoins and the related carbon emissions.
The bill now awaits the final approval from the New York governor’s office, which will make New York the first state in the U.S. to place a moratorium on crypto mining. This moratorium is expected to impact the already volatile cryptocurrency market, which is subject to extreme and unpredictably high price swings.
The AG noted that virtual currency market exposes investors to dangerous risks, such as wild price swings and potential losses due to hacking, fraud, or theft. She added that many issuers of virtual currencies are not regulated and therefore are not subject to net capital requirements or examinations.
The AG generally offers New Yorkers guidance on the various risks associated with cryptocurrencies to protect New Yorkers from this extreme volatility.
Earlier in 2022, the AG issued a taxpayer notice to virtual currency investors and their tax advisors to accurately declare and pay taxes on their virtual investments. In October 2021, the AG directed unregistered crypto lending platforms to cease operations for not fulfilling their legal obligations. In March 2021, the AG warned New Yorkers of the risks of cryptocurrency investments and reminded investment platforms of their legal obligations.
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