Letitia James, the New York Attorney General, has made several statements towards cryptocurrency investment on Friday, June 3. The AG released a statement commenting on the volatility of crypto assets and warned investors of the high-risk nature of investing in crypto, as seen in the crash of the UST stablecoin in May. James also highlighted that billions have been lost in crypto in 2022.
New York is also focusing on banning proof-of-work crypto mining. The ban of cryptocurrency mining in one of the largest states in the United States could see many currencies crash even further. James aims to make investors aware of the increased risks of investing in cryptocurrencies as new laws and regulations are implemented. However, the effects of a ban on POW mining are yet to be seen.
According to an investor alert that was published, James stated that losses are at an all time high, reaching losses of “hundreds of billions.” She also stated that even the digital assets that most investors are aware of, such as Bitcoin and Ethereum, and are traded in traditional exchanges have the potential to crash. Using this reasoning, James has argued that investing in crypto right now could create more losses for investors.
In addition, the AG also asked New York investors to take extra caution before putting their hard-earned money into crypto.
Moreover, the published alert from the attorney general also highlighted other factors that discouraged investors. These factors include:
- High transaction costs
- The unpredictability of the market
- Instability of some stablecoins
- Difficulties in cashing out
The announcement also reminded the investors that most of these digital currencies are not regulated.
Additionally, the alert came after the Senate passed a bill that banned POW mining in New York state. If Governor Hochul approves this bill, it will prohibit new mining operations. As well, those who already have their licenses to mine will likely be unable to renew them.
Many crypto investors are waiting for decisions on the bill, but what final verdict will come is yet to be seen.
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