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A visual representation of digital currencies.
Yuriko Nakao | Getty Images
New York Attorney General Letitia James sent a scathing warning to investors and industry members on Monday about the dangers of cryptocurrencies.
“We are sending a clear message to the entire industry: either you play by the rules or we will shut you down,” she said in a press release.
James’ warning, which was aimed at individual investors and members of the crypto industry, comes amid a major start to 2021 for digital assets such as bitcoin.
The cryptocurrency hit a new high above $ 58,000 earlier this month, after gaining the attention of Wall Street banks, companies like Tesla, and even the U.S. government.
Bitcoin, which was created in 2009, has gone from a protest against the banking system to a kind of “digital gold” that is starting to appeal to mainstream investors.
Investment banks such as JPMorgan and Goldman Sachs have shown interest in the asset class. Additionally, companies like Mastercard have taken significant steps to support cryptocurrencies. Tesla invested $ 1.5 billion in Bitcoin in February.
The price of bitcoin has risen more than 10% in the past 24 hours to reach $ 48,528 at around 1:51 p.m. ET, according to CoinDesk. Other popular digital currencies include Ethereum and Litecoin.
James told members of the crypto industry in New York that they need to be registered with the Office of the Attorney General’s Office of Investor Protection.
Parties who are required to register but fail to do so face civil and criminal prosecution, the office said in a statement.
Monday’s alert comes two weeks after the attorney general took legal action against Coinseed, a trading platform for digital currency.
James alleged that Coinseed was operating a virtual currency trading business in New York City, operating as an unregistered broker for more than three years while raising more than $ 1 million in assets from investors.
“We will not hesitate to take action against anyone who breaks the law,” she said.
“Too often greedy industry players take unnecessary risks with investor money, but today we are leveling the playing field and issuing alerts to investors and industry members across the board. country, ”added James.
She also told investors to be wary of investing in cryptocurrencies.
“All investors should proceed with extreme caution when investing in virtual currencies. Cryptocurrencies are volatile, high-risk investments that could lead to devastating losses as quickly as they can generate gains,” said James.
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