New York State Attorney General Letitia James on Monday issued two investor alerts in response to the “extreme risk” that she says New Yorkers face when they invest in cryptocurrencies.
The first alert urged “extreme caution when investing in virtual currencies."
The second warned brokers, dealers, salespersons, and investment advisers that they could face civil and criminal liability if they don’t fulfill their obligations regarding registration with the State of New York when they do business with virtual currencies.
“Too often, greedy industry players take unnecessary risks with investors’ money, but, today, we’re leveling the playing field and issuing alerts to both investors and industry members across the nation,” James said.
“All investors should proceed with extreme caution when investing in virtual currencies. Cryptocurrencies are high-risk, unstable investments that could result in devastating losses just as quickly as they can provide gains.”
And when it comes to industry professionals, “we will not hesitate to take action against anyone who violates the law,” James said.
Bitcoin at last check traded at $48,667.61, up 11%. Extreme moves have been the norm in recent days for the digital asset, which has quintupled in the past year. They have corrected 15% since Feb. 20.
Advocates of bitcoin say it represents a store of value -- a hedge against declines by the dollar and other assets and a hedge against inflation.
Bitcoin bears point out that it’s barely used in legitimate commerce and can drop just as quickly as it rises, which has happened plenty of times in recent years.