Bill > S07824

This bill establishes a new legal article in New York's penal code specifically addressing cryptocurrency fraud, creating three primary criminal offenses: virtual token fraud, illegal rug pulls, and private key fraud. The bill provides detailed definitions for technical terms like blockchain, virtual tokens, developers, and private keys, ensuring a comprehensive legal framework for prosecuting crypto-related crimes. Virtual token fraud occurs when someone intentionally deceives another in any transaction or action related to virtual tokens, while an illegal rug pull happens when a developer creates a class of tokens with misleading representations and then sells or abandons the project, causing significant financial loss to token holders. Private key fraud involves obtaining, disclosing, or misusing another person's private cryptographic key without their clear, informed consent. The legislation imposes substantial penalties for these offenses, including potential fines up to $5 million for individuals (or $25 million for non-natural entities) and imprisonment of up to 20 years. By defining these specific crypto-related crimes with precise legal language, the bill aims to protect investors and establish clear legal boundaries in the rapidly evolving cryptocurrency ecosystem.

Housing and Urban Affairs

https://www.nysenate.gov/legislation/bills/2025/S7824