New York Bill Seeks to Criminalize Crypto Rug Pulls and Scams

Quick take:

• A newly proposed bill in the New York legislature is looking to criminalize fraudulent activities, including crypto scams and rug pulls.
• New York has also shown an interest in providing a framework to ease the life of crypto investors.

Kevin Thomas, New York State Senator, has proposed a bill criminalizing certain illicit activities in the crypto space. These include crypto rug pulls, fraudulent activities, scams, misuse of private keys, and various others.

Bill S8839 will define, penalize and criminalize developers and projects duping crypto investors and luring them to invest in scam projects.

A bill aimed at protecting the investors

Thomas, through the bill, seeks to provide a clear-cut framework against rising crypto crimes. The proposed legislation will also help users to combat fraudulent activities. The bill proposes to impose charges on developers who sell “more than 10% of such tokens within five years from the date of the last sale of such tokens.”

Exposing or exploiting another person's private keys without their previous affirmative authorization is known as private key fraud. Developers who do not publicly declare personal crypto holdings on the main page of the principal website might be charged with false failure to disclose an interest in digital tokens, according to the law.

At the time of writing, a committee reviewed the measure to see if it was eligible for floor discussion.