Several New York lawmakers have shown their support for the state’s new Crypto Regulation, Protection, Transparency, and Oversight (CRPTO) Act. The proposed bill was unveiled by New York Attorney General Letitia James on May 5 and seeks to extend the regulatory authority over crypto companies.
According to James, the proposed legislation aims to “tighten regulations on the crypto industry to protect investors, consumers, and the broader economy.” She highlighted that the crypto industry has seen billions lost due to fraud, with low-income investors and people of color being the most affected.
The bill proposes several measures to tackle fraud and dysfunction in the crypto industry. It requires crypto firms to refund customers who have been defrauded on their platform and mandates public and independent auditing of crypto companies. The bill also prohibits crypto firms from lending and borrowing users’ assets and requires them to provide investors with all information about the risk and conflict of interest about crypto companies. Additionally, the bill prevents the owners of crypto platforms from creating crypto tokens.
One of the key features of the bill is that it would extend the powers of the Attorney General’s office to shut down companies that violate the proposed laws. The New York State Department of Financial Services will also receive additional powers to regulate digital assets.
The proposed legislation has already received support from several state senators and assembly members. The Deputy Majority leader of the New York assembly, Michaelle Solages, emphasized the importance of introducing common-sense protections for communities of color that are increasingly investing in crypto. State Senator Cordell Cleare commended the Attorney General for the bill, stating that all financial products and instruments must be honest, transparent, and failsafe, especially in emerging industries.
Some experts believe that the bill may not pass, as it relies on certain assumptions about crypto that are not true. However, considering that the same legislature passed a 2-year moratorium on Bitcoin mining activities in the state, New York lawmakers might be open to passing the bill.
Overall, the proposed Crypto Regulation, Protection, Transparency, and Oversight Act aims to protect investors and consumers while tightening regulations on the crypto industry.