US AG orders two crypto lending platforms to cease operations
Attorney General Letitia James of New York has directed two unregistered crypto companies to shut down operations for unlawfully selling and trading cryptocurrencies. On the same day, James has also ordered three other companies to submit their operations and product details.
Names of the companies were redacted by the office, but initially contained file names associated with Nexo and Celsius Network in its press release.
James recently won a lawsuit against cryptocurrency exchange Coinseed, forcing it to close down. She filed a case against the exchange in February for allegedly scamming investors with high trading fees and selling worthless tokens.
The press release pointed out that all crypto-related lending platforms operating in New York are required to register with the Office of the Attorney General (OAG).
Celsius network has also been warned by regulators in other US states such as Texas and New Jersey for selling ‘unregistered securities’.
“My office is responsible for ensuring industry players do not take advantage of unsuspecting investors,” said James in the office’s press release. “We’ve already taken action against a number of crypto platforms and coins that engaged in fraud or that illegally operated in New York.”
The statement has mentioned the New York’s Martin Act, which is the state’s fraud prevention law. It has called cryptocurrencies a type of securities since the nature and function of cryptocurrency lending products and services fall into such categories.
Martin Law gives the Attorney General of New York extensive legal authority to enable investigations into entities that trade securities in the state.
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OhNoCryptocurrency via https://www.ohnocrypto.com/ @Gauri Bhatia, @Khareem Sudlow