New York Assembly moves to tackle crypto scams with new Bill

New York lawmakers are taking a stand against deceptive cryptocurrency schemes that harm everyday investors. Lawmaker Clyde Vanel introduced Assembly Bill A06515 on March 5, 2025, aiming to classify certain crypto scams as crimes under New York’s penal code. 

If passed, this legislation would empower law enforcement to crack down on fraudsters with severe penalties, including hefty fines and potential prison sentences.

The bill targets some of the most notorious crypto scams, starting with rug pulls. This scheme occurs when a developer hypes up a crypto token, sells off more than 10% of the total supply within five years of the last sale, and then vanishes with the money. 

Another key focus is private key fraud, which involves stealing, sharing, or misusing a private key—the secret code that grants access to a person’s crypto wallet—without permission. 

Additionally, the bill requires developers to disclose their token holdings on their website’s homepage, preventing them from misleading investors about their stake.

If passed, the consequences for violators would be severe. Individuals found guilty could face fines of up to $5 million or 20 years in prison, while companies or organizations could be fined as much as $25 million. 

The goal is clear: to protect New Yorkers from crypto fraud by ensuring bad actors face significant repercussions.

Some crypto scams present challenges for classification under traditional fraud statutes, which can make enforcement more complex. By explicitly defining these offenses and their penalties, New York hopes to deter scammers and build investor confidence in the crypto market.

The bill still has a long way to go. It must pass debate and a vote in the New York Assembly before moving forward. If approved, it would take effect 30 days after the governor signs it into law. 

New York has a long history of strict financial regulations, and this bill aligns with its reputation for cracking down on fraud. 

A few weeks ago, NY senator James Sanders Jr introduced bill S4728 to create a cryptocurrency and blockchain study task force to assess the impact of the technology on influencing the financial sector, economy, and regulatory environment in the state.

As cryptocurrency continues to define the financial landscape, all eyes are on Albany, the capital city of New York, to see whether this legislation sets a precedent for other states looking to clean up the local crypto industry. If passed, New York could lead the charge in making the crypto space safer for investors.