In keeping with the recent uptick in regulatory enforcement, New York's Office of the Attorney General ("OAG") ordered two cryptocurrency lending platforms to cease their operations in the state of New York within 10 days of October 18, 2021. The cease-and-desist letters are based upon what the OAG described as the platforms' unlawful sale or offer for sale of securities and/or commodities without registering with the state. The announcement does not disclose the identities of the companies receiving the letters.
In addition to the cease-and-desist letters, the OAG also sent three unnamed cryptocurrency lending platforms requests for documents and information about their activities and products. "Cryptocurrency platforms must follow the law, just like everyone else, which is why we are now directing two crypto companies to shut down and forcing three more to answer questions immediately," said Attorney General Letitia James in a press release. "My office is responsible for ensuring industry players do not take advantage of unsuspecting investors."
DISCLAIMER: This article was originally published by McGonigle PC prior to their combination with Davis Wright Tremaine LLP. The article is published here with permission.