New York lawmakers have proposed a bill targeting cryptocurrency fraud, specifically aiming to combat rug pull scams that have become prevalent in the space. The legislation, introduced by Assemblymember Clyde Vanel, seeks to establish criminal penalties for fraudulent practices associated with digital assets, particularly those that deceive investors through abrupt project collapses.
The bill, identified as A06515, would categorize “virtual token fraud” as a specific offense, targeting deceptive activities within cryptocurrency markets. It defines virtual tokens broadly, including security tokens and stablecoins, to ensure a comprehensive regulatory approach to emerging financial risks.
Recent high-profile rug pulls, such as the collapse of the Libra token, have intensified concerns among regulators. The token’s developers allegedly siphoned over $107 million, triggering a near-total price crash and causing significant losses for investors. Such incidents have led to renewed calls for stricter oversight and legal accountability.
Industry experts argue that fraudulent activities in crypto markets should fall firmly within the jurisdiction of law enforcement agencies. The bill’s proponents believe increased regulation is necessary to protect investors and maintain market integrity, particularly as memecoin scams and insider manipulation continue to undermine trust in the sector.
