New York Attorney General Letitia James ordered the closure of two cryptocurrency lending platforms and asked three other platforms to immediately respond to questions about their activities. Letters to businesses posted on the Attorney General’s website indicate that the two platforms are Nexo and Celsius Network.
New York attacks unregistered crypto lending platforms
New York Attorney General (NYAG) Letitia James announced on Monday his new efforts to crack down on unregistered cryptocurrency companies.
In New York City, lending platforms must register with the Attorney General’s Office (OAG) to operate in the state or offer products to its residents. The announcement details:
Today, Attorney General James ordered two of these lending platforms to immediately cease their unregistered and illegal activities in New York City and ordered three other platforms to immediately provide information about their activities and products.
The notice explains that crypto lending platforms “are essentially interest-bearing accounts that offer investors a rate of return on the virtual currencies that are deposited with them.” Under the Martin Law, âThe nature and function of the most common virtual currency lending products or services clearly falls under one of many categories of ‘security’. “
The United States Securities and Exchange Commission also considers loan products to be securities. SEC Chairman Gary Gensler recently told cryptocurrency exchange Coinbase that its lending products are securities.
The NYAG website also published cease and desist letters to the two loan platforms in question. While the letters were redacted, the file names indicated that they had been sent to Nexo and Celsius Network. Three other companies received a letter requesting information on their activities.
Nexo tweeted after the news broke, âNexo doesn’t offer its product and trade in New York, so it makes little sense to receive a C&D for something we don’t offer in New York anyway. . But we are going to engage with NY AG as it is clearly a mix of the recipients of the letter. We use IP-based geoblocking.
Attorney General James pointed out:
Cryptocurrency platforms must follow the law, like everyone else, which is why we are now ordering two crypto companies to shut down and forcing three more to answer questions immediately.
Last month, Attorney General James to close cryptocurrency trading platform Coinseed after filing a lawsuit against the company earlier this year. In February, it announced a deal with Bitfinex, Tether and related entities that ended their business in New York state and imposed a $ 18.5 million penalty on companies.
What do you think of New York Attorney General Letitia James taking action against unregistered crypto lending platforms? Let us know in the comments section below.
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