The Attorney General of New York has issued an alert, warning people of the “dangerous risks” of investing in cryptocurrencies, as the crypto markets have corrected significantly from their all-time highs.
New York AG Letitia James, in an investor alert, stated that investors have lost “hundreds of billions” and that cryptocurrencies are subject to extreme and unpredictably high price swings that make them among the most high-risk investments on the market.
Apparently referring to the collapse of the Terra (CRYPTO: LUNA), James said last month, some of those risks materialized as the price of multiple virtual currencies — from the newest coins to the most well-established coins — plunged deeply and wiped away hundreds of billions in investments.
“Over and over again, investors are losing billions because of risky cryptocurrency investments. Even well-known virtual currencies from reputable trading platforms can still crash and investors can lose billions in the blink of an eye,” James said.
“Too often, cryptocurrency investments create more pain than gain for investors. I urge New Yorkers to be cautious before putting their hard-earned money in risky cryptocurrency investments that can yield more anxiety than fortune,” she added.
AG highlights several factors to dissuade investors
Reminding investors that several digital currencies are unregulated, she highlighted several factors to dissuade investors, including the unpredictability of the market, difficulties in cashing out, high transaction costs, and the instability of some stablecoins.
The AG’s alert comes even as the New York State Senate passed a Bill that imposes a two-year moratorium on new crypto mining firms that use non-renewable power.
The Bill, which was passed by the state Assembly last month, also sought to pause renewals for existing operating permits.
