The New York attorney general has proposed a new law giving the agency expanded powers to regulate the state’s cryptocurrency industry.
The Cryptocurrency Regulation, Protection, Transparency and Oversight Bill (CRPTO) will be introduced in the New York State Senate and Assembly by June 8.
Under the document, the New York attorney general’s office will be able to issue subpoenas to cryptocurrency firms, as well as impose administrative fines of $10,000 to individuals and $100,000 to digital asset companies.
Prosecutor Letitia James has expressed her intention to shut down organizations suspected of fraud and illegal activity.
The bill would require crypto exchanges to conduct an independent audit and reimburse customers affected by fraud.
Cryptocurrency platforms will be required to implement KYC (“Know Your Customer”) procedures, and the use of the word “Stablecoin” in digital asset sales will be prohibited unless stable coins are pegged to the U.S. dollar or other fiat currency at a 1:1 ratio.
The bill would strengthen the authority of the New York State Department of Financial Services (NYDFS), which grants cryptocurrency companies a BitLicense license allowing them to operate in the state.
A few days ago, the NYDFS fined cryptocurrency exchange BitFlyer $1.2 million for violating cybersecurity regulations.
In recent years, the New York attorney general’s office has repeatedly warned the public about the risks associated with investing in cryptocurrencies.
In December, the agency proposed to ban investments in crypto-assets from the funds of pension funds.