On Thursday, a new legislation was proposed in New York that aims to impose additional regulations on digital asset firms. The proposed law, known as the “CRYPTO” Act—short for “Cryptocurrency Regulation Yields Protections, Trust, and Oversight”—would make it illegal for digital asset firms to operate without the necessary licenses.
The announcement came from Manhattan District Attorney (DA) Alvin L. Bragg, Jr., and New York State Senator Zellnor Myrie, who emphasized the urgency of regulating the cryptocurrency marketplace in the State.
NY’s Proposed Crypto BillIn contrast, the proposed CRYPTO Act would introduce criminal penalties for operating without a license, bringing New York’s regulatory framework closer to that of the federal system, where unauthorized conduct can result in up to five years in prison.
The new Act aims to ensure that digital asset businesses adhere to the same levels of diligence and transparency as traditional money transmitters.
Offenders could face charges ranging from a Class A misdemeanor to a Class C felony for activities involving $1 million or more within a year, potentially resulting in sentences of 5 to 15 years in state prison.
A “Shadow Financial System”Bragg further urged that the time has come for unlicensed cryptocurrency businesses to face criminal repercussions for not adhering to due diligence requirements.
Senator Myrie echoed Bragg’s sentiments, noting, “As the use of crypto has grown, so has illicit activity.” He emphasized that New York, as a major financial hub, must take seriously its regulatory responsibilities.
Myrie’s bill aims to align the state with the 18 other jurisdictions that have made unlicensed virtual currency transactions criminal offenses, to enhance consumer protection against potential fraud and scams.
The letter sent on Thursday and signed by Representatives Maxine Waters, Sean Casten, and Brad Sherman, expressed deep concerns regarding the SEC’s recent retreat from prosecuting violations related to “digital asset securities.”
Featured image from DALL-E, chart from TradingView.com
