New York Bill Seeks to Crack Down on Crypto Fraud

Only two weeks after the Securities and Exchanges Commission (SEC) launched a cyber unit to combat digital fraud, the New York State Assembly is considering bill A06515 to crack down on crypto scams.

The bill was proposed on March 5 and seeks to establish the "offenses of virtual token fraud, illegal rug pulls, private key fraud, and fraudulent failure to disclose interest in virtual tokens.”

The bill is being sponsored by NYS representative Clyde Vanel, who serves as the chair of the Banks Committee and chairs the Subcommittee on Internet and New Technology.

Bill A06515 cites blockchain’s potential, but calls for regulations that “align with the spirit of the blockchain and the necessity to combat fraud.” The bill cites DeFi use cases such as storing and moving money, investing, producing art, and voting, and it hails the technology as pushing us “to the brink of the future.”

The bill also cites bundled token rug pulls, and equates private key fraud to stealing someone’s debit card PIN.

While the SEC drops lawsuits against crypto companies such as Consensys, Uniswap, and Yuga Labs at a record pace, regulators appear to have set their sights on real malicious actors following multi-billion dollar memecoin scams such as LIBRA and MELANIA.