New York Attorney General Letitia James has warned that cryptocurrency investors are suffering catastrophic losses amid heightened market volatility.
Specifically, in an investor alert published this week Thursday, AG James cautioned that crypto investors are “losing billions” and warned that even bluechip coins and tokens, such as Bitcoin (BTC) and Ethereum (ETC), can plummet.
She went on to warn that the cryptocurrency market is “extremely unpredictable,” adding that, “Just last month, the market reached record lows and investors lost hundreds of billions.
READ: UK’s FCA warns of ‘significant issues’ with stablecoins as it drafts regulation
“New Yorkers should be cautious and think twice before putting their hard-earned money into this unstable market.”
AG James’ warning comes amid New York pushing to to ban proof-of-work (PoW) crypto mining.
Should this bill get the approval of Governor Kathy Hochul, new mining operations will be banned, and existing mining operations with licenses will not be able to renew their permits under any circumstances.
This would affect BTC, as it is mined on a proof-of-work basis.
As of 4 June, Bitcoin is currently trading around $29,750 as per CoinMarketCap data, marginally up over the last seven days.
Ethereum, meanwhile, is changing hands at $1,780 and is slightly down over the last week.
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The UK’s Financial Conduct Authority (FCA) has said it will take the recent volatility and turmoil in the crypto markets into account when drafting regulation.
Sarah Pritchard, the executive director of markets at the FCA, said the UK’s financial regulator will “absolutely” evaluate the risk of stablecoins, such as USDT and USDC, de-pegging.
This comes hot on the heels of TerraUSD (UST) de-pegging from the dollar, costing holders billions of dollars.
Speaking to Bloomberg this week, Pritchard highlighted the importance of the FCA in protecting UK crypto investors and warned that “significant issues” exist in the crypto markets at present.
READ: Blockchain Fest 2022: Cyprus hosts major crypto event
“It really shows at front of mind the really significant issues that exist here, both in terms of a well-functioning market and obviously consumer protection,” she said.
“In the last week where we saw significant price movements, it brings that into the fore and it shows the importance of making sure that people understand that that is a risk of where they put their money.”
In April, Britain’s Economic and Finance Ministry announced that it would be preparing stablecoin regulations this year as part of its digital assets framework.
The move was generally well received by the cryptosphere, as it was perceived to be a sign that crypto is here to stay and the UK government was potentially ready to embrace cryptocurrencies.
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Binance CEO Changpeng “CZ” Zhao has given his take on the ongoing crisis at Terraform Labs, which has resulted in both LUNA and UST crashing.
Specifically, CZ said that a hardforking to TERRA2 as a way of providing a new iteration of LUNA to holders as per their pre-crash wallet balances “won’t work.”
Continuing, the crypto billionaire said: “Reducing supply should be done via burn, not fork at an old date, and abandon everyone who tried to rescue the coin. I don’t own any LUNA or UST either. Just commenting.”
CZ noted that a viable alternative would be for Terra to use its Bitcoin reserves to buy back UST in a bid to return the algorithmic stable coin to its pegging with the US Dollar.
READ: El Salvador doubles down on Bitcoin after BTC price slides to $30,000
He also moved to quash speculation that Binance took part in LUNA’s second round of fundraising, and insisted that the company doesn’t own any UST.
“I need to address falsehoods circulating in crypto twitter. Binance did not participate in the 2nd round of Luna’s fund raising nor did we acquire any UST,” CZ said.
“Binance Labs invested $3m USD in Terra (the layer 0 blockchain) in 2018. UST came much later after our initial investment.”
He went on to emphasise that Binance Labs has “invested in hundreds of projects over the last 4 years, including exchange competitors and many competing blockchains.
“A few of them have fallen by the wayside, but a few have been extremely successful. That’s how investments work.”