NY attorney general tells digital currency firms to ‘play by the rules’ or shut down

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New York Attorney General Letitia James has fired a warning shot at rogue cryptocurrency companies, urging them to “play by the rules” or be forcibly shut down by the courts.

In an alert aimed at New York investors, Attorney General James described the “extreme risk” of investing in digital currencies, made all the more relevant by the recent surge in digital currency prices. It follows on from an earlier warning that investors should use “extreme caution when investing in virtual currencies.”

Facing digital currency firms, the attorney general said organizations would face “both civil and criminal liability” for failures to fulfill their obligations, including those around registration and compliance in the state of New York.

“Too often, greedy industry players take unnecessary risks with investors’ money, but, today, we’re leveling the playing field and issuing alerts to both investors and industry members across the nation.”

“All investors should proceed with extreme caution when investing in virtual currencies. Cryptocurrencies are high-risk, unstable investments that could result in devastating losses just as quickly as they can provide gains. We will not hesitate to take action against anyone who violates the law.”

Addressing the recent actions of fraudulent digital currency operations like Coinseed, and illegal activity seen at Bitfinex and Tether, James said the state was sending a clear message to those who would operate outside the law.

“Two weeks ago, we filed a lawsuit to shut down Coinseed’s fraudulent operation. Last week, we ended both Bitfinex and Tether’s illegal activities in New York. And now, today, we’re sending a clear message to the entire industry that you either play by the rules or we will shut you down.”

The investor alert goes on to set out a number of tips to protect investors from falling foul of cryptocurrency scams and frauds.

Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups-from BitMEX to Binance, Bitcoin.com, Blockstream, ShapeShift, Coinbase, Ripple and Ethereum—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.