New York Attorney General Directs Two Crypto Lending Platforms to Cease Activities
Now we dont know who was named. We dont know whos the subject of this action. Some internet sleuths out there on crypto twitter saw that some of the file names were attached to prominent crypto lenders in the space, but coindesk is seeking to confirm if those were indeed the folks who got served. But again, this uh is another escalation in a brewing war against crypto lenders everywhere. Uh follows actions from state securities regulators, but for this to escalate up to the ny oag is a bit different. So were going to talk about that right now, im going to throw this straight to will, will whats going on here whats the deal. What am i looking at youre, looking at a shakeup in the industry right when bitcoin is hitting over 62k, so its interesting to see that we have like this, this collision course between regulators and bitcoins price and im wondering where that goes, but taking a step back. Zach youre totally correct there weve seen a lot of state regulators been going after these lending programs like celsius like block fi, like others out there and the sec itself, which is kind of the top dog in circuit. Hasnt, really commented yet on these. Besides, what happened with coinbase a few weeks ago that wasnt even going into litigation or a cease and desist? That was just a wells notice, saying hey! If you do something like this were going to come after you, this is a wholly different breed of attack by the regulators against these lending protocols.
Theyre saying stop what youre doing get out of town. We dont want that here. New york is infamous for its stance against crypto ill, probably toss that idea up to naomi and see what shes got but really interesting to see that this regulatory action is coming. At the same time, where bitcoin has returned to its may highs, just fascinating to see those two things happen, its like metaverse kind of stuff. There maybe ill throw out a pew uh yeah, no its its crazy to watch this play out, and i always have to remind myself when i read reports like this, and i immediately have like this anxiety attack but im like no. No, we expected that this was going to happen naomi calm down. We knew that they were going to come after crypto all along thats. The point i mean whats interesting. I talk to myself like that. Sometimes i do voices calm down, maybe um. No, but whats interesting is, i mean: bitcoin is special right. Bitcoin was created in a climate where there were a bunch of different competing currencies that were routinely shut down by government because they could be and bitcoin was, decentralized, could not be shut down and bitcoin sparked. This incredibly incredible blossoming of all of these third party apps and protocols and companies and business ventures which, just you know, created this space. That we know is the the crypto sphere right now and its incredible to watch all that growth.
But we have to remember. Bitcoin is special: it cant be shut down. If you are a company, if you have a ceo, if you are like a central product manager, i mean all of that could be targeted by government. So its not surprising to me that government is now cracking down on these lending platforms. I dont like it, but its not at all surprising to me, and i think that whats most exciting is seeing these products offered in the d5 space, where it is decentralized where it cant be shut down, and i think increasingly were going to move in that direction. As the government starts to get more and more heavy handed with its attack on crypto, i mean will to your point its interesting. You mentioned this collision course between price and regulators. It is interesting that maybe theyre kind of playing it like. Oh, the ecs coming out everyones expecting like a price push lets get some devastating news lets see if we could just kind of peg this price and not let it go out of proportion. But i will also mention that, as governments increasingly crack down in this financial sphere – and you know peoples all purchases above 600 are necessarily tracked by government, where theres, less and less control people have over their finances. I think its just going to push the the price of bitcoin up further its, not that this regulation is going to help you know dampen it.
I think more and more people are going to start to see the value of cryptocurrency and bitcoin, but well have to see how that plays out um but jen. I saw your hand uh go up so far to you yeah. I pulled a couple nuggets out of out of the sea sledders that went around and one was asking the company to keep all records, make sure that all records of new york, users or clients were kept, which was interesting because why do they need to knew that Know that, especially if this product, if if the cease letter is to protect unsuspecting consumers, why do they need to know whos already been involved was was one of the big questions for me and i wanted to read an excerpt from the press release. They said 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 and that follow the law phrase its just so interesting to me because weve spoken about It time and time again the law is so so unclear, especially when we look at the law across jurisdictions so to wills point i just feel like this is a shakeup and theyre looking for information on whos, using these platforms and its unclear, what theyre going to Do with that information yeah, i wanted to jump in there and also pull a nugget where they, where they said that theyre trying to protect new york, investors from exploitation, virtual currency schemes right and weve – got to dig into that phrase right because theres such a big Presumption in that that anyone whos participating in a high risk virtual currency scheme is being exploited.
No, a lot of people are willingly participating in this stuff, because its really awesome to provide collateral and be able to you know earn interest or get a loan or you know, participate in these financial products that werent available to them before its, not because theyre being Exploited its because the governments regulated out of existence them getting access to any similar tools in traditional finance and so cryptos come along and said, were gon na break down those barriers. You can have access to all these things, and just you know its up to you. Individual responsibilities, so the fact that new york has always played this nanny state role is not surprising that theyre now coming back and say were protecting you from your own decisions, customers, uh and its just.