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NY Attorney General Warns New Yorkers, Eric Adams, About the Perils of Crypto

New York's top law enforcement officer warns that investing in a currency built entirely on vibes is extremely risky.

Mayor Eric Adams speaks at a podium and gestures with his hands.

New York City Mayor Eric Adams delivers remarks the at the Association for a Better New York’s (ABNY) power breakfast at Cipriani Wall Street, June 1, 2022. (Michael Appleton/Mayor’s Office)

New York State Attorney General Tish James issued an "investor alert" on Thursday afternoon for cryptocurrencies, warning New Yorkers that the speculative investment vehicle was "among the most high-risk investments on the market."

James pointed to the recent collapse of several "coins" that wiped away billions of dollars in value. A so-called "stablecoin" from the company Terra collapsed spectacularly last month, with regulators worried that other "stable" cryptocurrencies might follow suit.

"I urge New Yorkers to be cautious before putting their hard-earned money in risky cryptocurrency investments that can yield more anxiety than fortune," the Attorney General said in the statement.

James's skepticism is in stark contrast with the boosterism of New York City Mayor Eric Adams, who has formed a cozy relationship with cryptocurrency investors, flown on their private jets, spoken at their conferences, and even converted three of his first paychecks to cryptocurrency.

So how are Adams's crypto investments currently faring? Adams said he was splitting his paycheck between the cryptocurrencies Bitcoin and Ethereum, and if he split them evenly, then as of yesterday, his paychecks had lost 27 percent of their value, compared to if he had just put his U.S. currency in a bank.

Still, Adams continues to push cryptocurrencies as an investment vehicle, and possible job creator, for everyday New Yorkers. Last month, City Hall told Hell Gate that Adams believes "cryptocurrency and blockchain technologies can play a key role in promoting an equitable recovery and building wealth in underserved communities throughout our city."

And speaking at a crypto conference in April, Adams said that he was "going to partner with all of the leaders in this industry and start building out school curriculum so we can have young people prepared to fill jobs that will be available" in the crypto industry.

City Hall has not responded to a request for comment about the AG's investor warning.

Governor Kathy Hochul might also want to check out the attorney general's warning: Her administration recently gave another reprieve to energy-hungry cryptocurrency miners in the Finger Lakes region.

And state lawmakers will have plenty of time to read the alert too, since today is the last day of the legislative session. A proposed ban on crypto mining has stalled after a round of intense, last-minute lobbying. (UPDATE 6/3/22: Legislators actually revived the crypto mining ban late last night, and passed it. Democracy in action!)

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