New York AG warns that if crypto firms don't 'play by the rules' they will get shut down

New York Attorney General (NYAG) issued a stern warning on Monday to crypto firms in the state: "you either play by the rules or we will shut you down.” She also warned investors that the crypto market carries "extreme risks."

In a statement, Attorney General Letitia James says she's committed to "leveling the playing field" for investors by cracking down "greedy industry players."

Just last week, James's office settled its legal battle with crypto exchange Bitfinex, which allegedly co-mingled funds with its sister company Tether to cover an $850 million loss. And two weeks ago, it filed a suit against crypto investment app Coinseed, alleging the firm failed to register as a broker-dealer in New York state. Today's statement suggested that more enforcement actions could be on the horizon.

The statement reminds crypto firms that they are not exempt from state registrations since virtual currencies are considered commodities in New York. "The OAG reminds industry members that those parties who are obligated to register, but do not, are subject to both civil and criminal enforcement under the law."

James also advised investors to 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," she said.