On June 14, the New York Attorney General, Letitia James,
announced a
stipulation and consent to judgment against a crypto-asset company for allegedly misleading investors on the risks of its program. Under the order, the defendants agreed to distribute all digital assets through its platform as restitution on an in-kind, “coin-for-coin” basis, with distributions to be made in the same amount and types of crypto-assets loaned by the investors. The stipulation followed a May 20
settlement with the company worth $2 billion.
The defendants were permanently restrained and enjoined from engaging in any conduct under the Martin Act and Executive Law § 63(12), as well as offering a cryptocurrency lending product in New York State. However, the order specified that if future state or federal legislation permitted crypto lending in the state, the defendant may seek permission from the New York AG to lift the ban. The defendants further agreed to fully cooperate with the New York AG as it continued to investigate the matter. The order also required the defendants to disclose to consumers within thirty days of its execution that the defendant is not registered with the SEC or the CFTC, along with detailing risk factors, among other disclosure requirements. The defendants neither admitted nor denied the allegations in the complaint, aside from admitting to personal and subject matter jurisdiction.
