New York Attorney General Letitia James issued two alerts in response to the “extreme risk” posed to New Yorkers investing in virtual or “crypto” currencies. James first issued an investor alert urging “extreme caution when investing in virtual currencies.”
Additionally, James issued an alert to industry members, reminding brokers, dealers, salespersons and investment advisors that they could potentially face “both civil and criminal liability” if they do not fulfill their obligations regarding registration with the state of New York when doing business with virtual currencies.
The alert recommends extreme caution when investing in virtual currencies. Trading in the current market exposes investors to risks, such as wild price swings, conflicts of interest among trading platform operators, and increased chances of market manipulation.
Further, even “legitimate” investments in virtual assets are subject to speculative bubbles, and the continued tragedy of the coronavirus disease 2019 public health crisis has put law enforcement on high alert for scammers and unscrupulous industry players using deceptive tactics to gain confidence with false promises of high or even guaranteed returns.