SAN FRANCISCO (KGO) -- Should the Wild West be tamed? That is the question being asked in California about the crypto industry, a financial sector that prides itself on being independent from most government regulators. But some want to change that.
Patrick Duffy knows his numbers.
The CPA recently decided to dive into the crypto market. He's glad he moved slowly.
"It dipped and kept falling. So I said, 'Well, I guess it's time to cut my losses,'" Duffy said.
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Duffy originally invested $500.
That was down to $230 in just nine months.
He withdrew his money, but the company kept $40. That's something he still doesn't understand.
"I thought ease in should be ease out," Duffy said.
Many others who contacted 7 On Your Side also complained about the fees.
"Since (January) 4th I have not been able to withdraw funds," wrote one viewer. "Company support tells me I need to pay a 10% security deposit because my account is under review for fraudulent activity."
Another wrote: "To take out $1,000, $10,000 or $100,000 or $300,000, I have to pay you $30,000 up front first."
a new bill Assembly Bill 39, by Assemblyman Tim Grayson of Concordit would require cryptocurrency companies to be licensed in California to do business here.
The bill has the support of the California Federation of Consumers.
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"This is really an industry where it's kind of 'buyer beware' on steroids," said Robert Herrell, the federation's chief executive.
New York in 2015 became the first in the nation to require crypto companies to obtain a license they call a "bit license."
It refused to license FTX, now bankrupt.
"And literally when FTX went down, because of the protections that people in New York had, New Yorkers were better protected when FTX went down than California was," Herrell said.
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Last year, the legislature passed a similar licensing bill in California, but Gov. Newsom vetoed it, saying it would be too costly and the state should see what federal regulators do.
Duffy disagrees, saying that more supervision is needed.
โIf they are regulated, at least the state can come in and tell them something. They can be audited. They can be tested,โ she said.
Overall, the cryptocurrency market lost $2 trillion in 2022.
Check out more stories and videos from Michael Finney and 7 on your side.
The 7OYS Consumer Hotline is a free mediation service for consumers in the San Francisco Bay Area. We help people with consumer related problems; We cannot help with business-to-business cases, or cases involving family law, criminal matters, landlord-tenant disputes, employment issues, or medical issues. Please review our frequently asked questions here. As part of our process to assist you, it is necessary for us to contact the company/agency you are writing about. If you do not want us to contact them, please let us know right away as it will affect our ability to work on your case. Due to the high volume of emails we receive, please allow 3-5 business days for a response.
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