Regulators from New York City have recently jumped in to help investors who have been recently duped or burned by crypto firms. On Monday, August 1, New York Attorney General Letitia James issued an investor alert asking investors who feel cheated to contact her office.
During the second quarter of 2022, we have seen several crypto businesses going insolvent and freezing withdrawals on the platforms as they struggled to meet the high liquidity demand. Several crypto firms and lenders filed for bankruptcies leaving investors in financial ruin.
The Office of the Attorney General (OAG) said that it’s interested in hearing from New York investors who have been locked out of their accounts and were unable to access their investments. They also want to hear from investors who have been deceived about their crypto investments. Attorney General Letitia James said:
“The recent turbulence and significant losses in the cryptocurrency market are concerning. Investors were promised large returns on cryptocurrencies, but instead lost their hard-earned money.
I urge any New Yorker who believes they were deceived by crypto platforms to contact my office, and I encourage workers in crypto companies who may have witnessed misconduct to file a whistleblower complaint.”
The Recent Crypto Winter
The second quarter of 2022 witnessed heavy liquidations over concerns of popular firms like Three Arrows Capital, Celsius Networks, and Voyager Digital. It all started with the dramatic devaluations of projects like Terra and LUNA.
This has forced regulators to step into the matter and have a close look at the crypto sector. The recent action from New York OAG is one of the first major initiatives from the regulators.
Last month in July, the crypto markets bounced back with some strong institutional demand and inflows. However, on-chain metrics suggest that the network demand hasn’t picked much for Bitcoin and Ethereum despite the price surge. This could be a classic case of a bear market rally and not a trend reversal.