New York Attorney General Letitia James is proposing the Crypto Regulation, Protection, Transparency and Oversight Act (CRPTO) to give her office broader enforcement authority over cryptocurrency firms that have operations in the state. The bill would codify the New York State Department of Financial Services' authority to license participants in the sector and oversee the state's digital asset licensing regime. The proposed legislation would require crypto exchanges to have independent public audits of their financial statements and to reimburse customers that are defrauded. It would also require crypto firms to have know-your-customer procedures and would ban the use of the term “stablecoin” to market virtual currencies unless their values maintain a one-to-one ratio to the dollar. The bill will be submitted to the New York State Senate and Assembly for consideration during the 2023 legislative session. The proposed legislation is the latest action taken by Ms. James to regulate the crypto market, including filing suits against a number of crypto platforms for failing to register as securities and commodities broker-dealers.

(By Mengqi Sun)