A visual representation of digital currencies.
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New York Attorney General Letitia James sent a strong warning to investors and industry insiders about the dangers of cryptocurrencies on Monday.
“We are sending a clear message to the entire industry that you will either follow the rules or we will close you down,” she said in a press release.
James’s warning, which addressed individual investors and members of the crypto industry, came amid a great early 2021 for digital assets like bitcoin.
The cryptocurrency hit a new record of more than $ 58,000 earlier this month, after attracting the attention of Wall Street banks, companies like Tesla and even the U.S. government.
Bitcoin, which was created in 2009, has evolved from a protest against the banking system to something like a “digital gold” that is starting to catch traditional investors.
Investment banks like JPMorgan and Goldman Sachs have shown interest in the asset class. In addition, companies like Mastercard have made significant moves to support cryptocurrencies. Tesla invested $ 1.5 billion in bitcoin in February.
The price of bitcoin has risen by more than 10% in the past 24 hours, to $ 48,528, approximately from 1:51 pm ET, according to CoinDesk. Other popular digital currencies include ethereum and litecoin.
James told members of the crypto industry in New York that they must be registered with the Attorney General’s Office for Investor Protection.
Parties who are required to register, but do not, are subject to civil and criminal execution, the office said in a statement.
Monday’s warning comes two weeks after the attorney general opened a case against Coinseed, a digital currency trading platform.
James claimed that Coinseed was operating a virtual currency trading business in New York, functioning as an unregistered broker for more than three years, while collecting more than $ 1 million in assets from investors.
“We will not hesitate to take action against anyone who violates the law,” she said.
“Greedy industry players often take unnecessary risks with investor money, but today we are leveling the playing field and issuing alerts to investors and industry members across the country,” added James.
She also told investors to be cautious when investing in cryptocurrencies.
“All investors should exercise extreme caution when investing in virtual currencies. Cryptocurrencies are unstable and high-risk investments that can result in devastating losses as quickly as they can generate gains,” said James.
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