A New York state senator introduced a new bill that would add four different cryptocurrency-related crimes to the fraud section of the state’s penal code.
New York State Senator Kevin Thomas introduced Senate Bill S8839 this week and said the legislation was designed to “enhance consumer protections” within the cryptocurrency industry “by giving prosecutors a legal framework to pursue crypto crimes.”
The bill specifically names four crimes – virtual token fraud, illegal rug pulls, private key fraud and “fraudulent failure to disclose interest in virtual tokens” – and tags each with a maximum criminal fine of $5 million or 25 years in prison in most cases.
Officials in Thomas’ office said the bill is still in a “rough draft” form and was spurred by Assemblymember Clyde Vanel, who introduced a companion bill in the lower house.
The bill is still being amended and the figures for fines and prison sentences are subject to change. They are still sketching out how the rules would work in terms of jurisdiction.
“New York is the center for both the global financial system and a growing cryptocurrency industry,” Thomas said in a statement.
“It’s crucial that we properly balance consumer protection with creating an environment that is ripe for investment and innovation. This future-forward legislation will protect consumers, enhance the security and reliability of the crypto ecosystem, and provide clearer guidance to allow companies to innovate and thrive in the crypto economy.”
Thomas, who chairs the Senate Consumer Protection Committee, noted that the Better Business Bureau said crypto-related scams tripled between 2019 and 2021 and losses from cryptocurrency scams reached $750 million in 2021, according to Federal Trade Commission data.