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Investors Lost Hundreds of Billions in Cryptocurrency
Investments as the Market Reached Record Lows
NEW YORK – New York Attorney General Letitia James today issued an alert to New Yorkers to remind them of the dangerous risks of investing in cryptocurrencies after the market reached record lows last month and investors lost hundreds of billions. Cryptocurrencies are subject to extreme and unpredictably high price swings that make them among the most high-risk investments on the market. Last month, some of those risks materialized as the price of multiple virtual currencies — from the newest coins to the most well-established coins — plunged deeply and wiped away hundreds of billions in investments. This is not the first time the market has plunged. To protect New Yorkers from this extreme volatility, Attorney General James offers New Yorkers guidance on the various risks associated with cryptocurrencies.
“Over and over again, investors are losing billions because of risky cryptocurrency investments,” said Attorney General James. “Even well-known virtual currencies from reputable trading platforms can still crash and investors can lose billions in the blink of an eye. Too often, cryptocurrency investments create more pain than gain for investors. I urge New Yorkers to be cautious before putting their hard-earned money in risky cryptocurrency investments that can yield more anxiety than fortune.”
The virtual currency market exposes investors to dangerous risks, such as wild price swings and potential losses due to hacking, fraud, or theft. Even “legitimate” investments in virtual assets are subject to speculative bubbles and security issues. Investors in virtual assets should beware of the many significant risks of investing in these products including:
Today’s investor alert continues Attorney General’s James efforts to regulate the cryptocurrency industry and protect New York investors. Earlier this year, Attorney General James issued a taxpayer notice to virtual currency investors and their tax advisors to accurately declare and pay taxes on their virtual investments. In October 2021, Attorney General James directed unregistered crypto lending platforms to cease operations for not fulfilling their legal obligations. In March 2021, Attorney General James warned New Yorkers of the risks of cryptocurrency investments and reminded investment platforms of their legal obligations.
Additionally, in 2018, the Office of the Attorney General (OAG) released its “Virtual Markets Integrity Initiative” report, a more detailed overview of the virtual currency markets in New York and around the world. The report gives basic, but important information about how virtual currencies trade, and the risks investors face when they buy and sell, even on “legitimate” trading platforms.
If you are worried that you or someone you love has been a victim of investment fraud, contact OAG’s Investor Protection Bureau immediately. If you have worked in the virtual assets industry and believe you may have knowledge of wrongdoing, contact OAG’s Investor Protection Bureau immediately or the online whistleblower portal.
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