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NY Attorney General Targets 5 Crypto Companies: 2 Lending Platforms Ordered to Shut Down

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New York Attorney General Letitia James has ordered two cryptocurrency lending platforms to shut down and requested three other platforms to answer questions regarding their activities immediately. The letters to the companies published on the attorney general’s website indicate that the two platforms are Nexo and Celsius Network.

New York Cracks Down on Unregistered Crypto Lending Platforms

New York Attorney General (NYAG) Letitia James announced Monday her new efforts to crack down on unregistered cryptocurrency companies.

In New York, lending platforms must register with the Office of the Attorney General (OAG) to operate in the state or offer products to its residents. The announcement details:

Today, Attorney General James directed two of these lending platforms to immediately cease their unregistered and unlawful activities in New York and directed three other platforms to immediately provide information about their activities and products.

The notice explains that crypto lending platforms “are essentially interest-bearing accounts that offer investors a rate of return on virtual currencies that are deposited with them.” Under the Martin Act, “The nature and function of the most common virtual currency lending products or services demonstrate that they fall squarely within any of several categories of ‘security.’”

The U.S. Securities and Exchange Commission also views lending products as securities. SEC Chairman Gary Gensler recently told cryptocurrency exchange Coinbase that its Lend products were securities.

The NYAG website also published cease and desist letters to the two lending platforms in question. While the letters were redacted, the file names indicated that they were sent to Nexo and Celsius Network. Three other unnamed firms received a letter asking for information about their activities.

Nexo tweeted after the news broke: “Nexo is not offering its Earn Product & Exchange in New York, so it makes little sense to be receiving a C&D for something we are not offering in NY anyway. But we will engage with the NY AG as this is a clear case of mixing up the letter’s recipients. We use IP-based geoblocking.”

Attorney General James emphasized:

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.

Last month, Attorney General James shut down the cryptocurrency trading platform Coinseed after filing a lawsuit against the company earlier this year. In February, she announced an agreement with Bitfinex, Tether, and related entities that ended their trading activity in the state of New York and imposed an $18.5 million penalty on the companies.

What do you think about New York Attorney General Letitia James taking action against unregistered crypto lending platforms? Let us know in the comments section below.

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Facebook (Meta) Removes It’s Ban Of Crypto Ads

Crypto advertising on social media has been a hot topic throughout the year. We’ve covered much of the back and forth both at Bitcoinist and over at our sister network NewsBTC over the years. A prime example of this occurred in recent months Google shifted their cryptocurrency ad policy, in what seemed to show a::Listen

Crypto advertising on social media has been a hot topic throughout the year. We’ve covered much of the back and forth both at Bitcoinist and over at our sister network NewsBTC over the years.

A prime example of this occurred in recent months Google shifted their cryptocurrency ad policy, in what seemed to show a slight increase in favorability when it comes to crypto platforms advertising on Google channels.

Now Facebook, now rebranded as Meta, is making it easier for crypto platforms to run their advertisements on their social media channels.

Facebook & A Changed Perspective?

Facebook has been no stranger to the crypto conversation for several years now. The company’s rebrand to Meta last month sparked a metaverse extravaganza in crypto, and Meta CEO Mark Zuckerberg has shown a long-time interest in building much more than a social media platform.

However, efforts thus far have mostly fallen flat. The company’s piloted wallet project, Novi, as well as unreleased crypto project Diem (a rebrand of previous Facebook token project, Libra), have both faced substantial pushback from U.S. congressional representatives. Libra was first brought to a stall in 2019. Furthermore, the creator of the aforementioned pilot program has told the company that he will be departing, adding more challenges for the firm looking forward.

However, this week’s move shows that Meta still has a vested interest in furthering engagement in crypto – in some sort of capacity.

Related Reading | China’s Crackdown Could Expand: Central Bank Eyes The Metaverse

Throughout most of this week, much of the NASDAQ has been seeing red. Despite Meta Platforms adjustments on crypto advertising, it was not exempt from a major dip so far this week. | Source: NASDAQ: FB on TradingView.com

So, What Are The Changes?

What’s really changed here? In the past, Meta required crypto marketers to submit an application that included any licenses, any public stock listings, and other detailed information. This week’s change will allow crypto exchanges and wallets to be qualified to advertise on the platform if they possess just 1 of a potential 27 regulatory licenses. The announcement came via a blog post on the platform’s site to start off December.

Crypto advertising more broadly is arguably at it’s peak when looking back historically. Social media platforms are becoming increasingly receptive to more lenient policy around crypto, and major exchanges have been establishing themselves and spending substantial marketing dollars to do so.

Will this be the first step for Meta in turning the tide of it’s years of misfortune and mis-steps in the crypto space?

Related Reading | Shiba Inu Grows 33% In One Day As Whales Load Up On SHIB

Featured image from Pexels, Charts from TradingView.com
The writer of this content is not associated or affiliated with any of the parties mentioned in this article. This is not financial advice.

NY Attorney General Targets 5 Crypto Companies: 2 Lending Platforms Ordered to Shut Down

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