Two cryptocurrency lending platforms have been asked to cease activity in New York

New York's Attorney General, Letitia James, has directed two cryptocurrency lending platforms to stop trading in the state. The two firms, which are reportedly Nexo and Celsius, have been sent cease and desist letters. Three other crypto lending companies have also been asked to provide the Attorney General with information about their businesses. Cryptocurrency lending companies allow users to borrow funds against cryptocurrency rather than traditional assets such as property.

A redacted version of a letter from the Attorney General's Office explained that they were "in possession of evidence that (each company) is unlawfully selling or offering for sale securities and/or commodities within or from the State of New York without having registered".

In New York, crypto lending platforms must abide by the Martin Act and register with the Attorney General's Office if they wish to operate or serve customers in the state. The Martin Act is an anti-fraud law passed in 1921. The Act gives New York's Attorney General the power to investigate companies for financial fraud.

In September, crypto trading company Coinseed was shut down following a lawsuit filed by James over allegedly selling a worthless token and defrauding investors. The Attorney General instructed trading platforms Bitfinex and Tether to cease all trading activity in New York earlier this year. In a statement about her recent actions, James said "Cryptocurrency platforms must follow the law, just like everyone else".

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