New York lawmakers back proposed Crypto Regulation, Protection, Transparency and Oversight Act

New York lawmakers back proposed Crypto Regulation, Protection, Transparency and Oversight Act

Several New York lawmakers have thrown their support behind a new Crypto Regulation, Protection, Transparency and Oversight (CRPTO) Act. On May 5, New York Attorney General Letitia James introduced the legislation, which would widen the scope of regulatory authority over crypto firms. According to James, the proposed bill will “tighten regulations on the crypto industry to protect investors, consumers, and the broader economy.”

Proposed legislation aims to protect investors

Fraud within the cryptocurrency industry has led to the loss of billions of dollars for investors, with low-income investors and people of color feeling the greatest impact. James proposes common-sense measures to end fraud and dysfunction in the crypto space. The proposed legislation requires crypto firms to refund customers defrauded on their platform and forces crypto companies to undergo public and independent auditing.

Key features of the bill

The proposed legislation will prevent crypto firms from lending and borrowing users’ assets, give investors all information about risk and conflict of interest about crypto companies, and prevent the owners of crypto platforms from creating crypto tokens. The bill also extends the powers of the office of the Attorney General to shut down companies that violate the proposed laws. The New York State Department of Financial Services will also get additional powers to regulate digital assets.

Lawmakers divided on the bill

The proposed bill has received support from several state senators and assembly members. The Deputy Majority leader of the New York assembly, Michaelle Solages, said, “With communities of color increasingly drawn to investing in crypto, it’s essential that we introduce common-sense protections to prevent them from facing higher financial risks.” Meanwhile, some believe that the lawmakers might not pass the bill. An expert from K&L Gates law firm, Andrew Hinkes, said the bill would fail “because it relies on certain assumptions about crypto that are simply not true.”

It remains to be seen whether the proposed legislation will pass, but given the state’s recent 2-year moratorium on Bitcoin mining activities, lawmakers might be open to considering the bill.


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