On October 18, New York Attorney General Letitia James announced the closure of an anonymous group of cryptocurrency lending services operating in the state.
According to an official press release, the firms would be violating the provisions of General Business Law 352 et seq — more often known as the "Martin Act."
Ms. James claims that Bitcoin lending platforms are "interest-bearing accounts" that must be registered with the Office of the Attorney General (OAG) to function in New York.
The Office of the New York Attorney General did not name the firms involved; nevertheless, the news release states that the Attorney General sent five notices to many New York-based platforms.
“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,”
Among a slew of 14 demands, the Attorney General demanded cryptocurrency companies for user/client names, user IDs, date, time, IP addresses, and any other information gathered from any customer who might connect from New York.
Ms. James also requested personal information from \individuals, with unverified accounts, a description of KYC methods, a list of jurisdictions to which they provide services, and legal papers.
New York is a financial hub. Nonetheless, it is possibly the state with the worst reputation in the United States for its legislative structure and connection with cryptocurrencies.
The notorious Bitlicense is recognized for making it almost impossibly expensive and difficult to run a cryptocurrency trading firm.
Its inventor, New York's first Superintendent of Financial Services, Benjamin Lawsky, resigned his job to establish a successful consulting business that assisted people interested in acquiring, you guessed it, a Bitlicense.
Its abolition was one among the promises made by Democrat presidential pre-candidate Andrew Yang (who is currently running for New York City Mayor).
Still, it appears that the current President of the United States, Democrat Joe Biden, does not share the same vision and has selected a cabinet that is more focused on corporate control.
In America, cryptocurrency loan service efforts have had a difficult year. Even Coinbase, the largest cryptocurrency exchange in the United States, was unable to compete with a Bitcoin lending business that promised to surpass high-yield accounts offered by traditional banks.