Key takeout
- The New York State Legislature has introduced a bill targeting crypto fraud with a penalty of up to $25 million.
- The bill criminalizes Ragpur and commits unauthorized access to private keys with severe penalties.
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New York lawmakers have taken a strong stance against crypto fraud. Assembly member Clyde Vannell has introduced new bills aimed at curbing deceptive practices such as lagpur and major private theft.
The proposed bill, Congressional Bill 6515, seeks to amend the state's criminal law by establishing criminal penalties for fraud related to virtual tokens. These include lagpur, private key fraud, and failure to disclose the economic benefits of digital assets.
Under the proposed law, developers who sell more than 10% of their total supply of virtual tokens within five years of their final sale could face Ragpur prosecution with the exception of small NFT projects.
“Whether it is natural or not, a developer is guilty of illegal lagpur if such a developer develops a class of virtual tokens and sells more than 10% of such tokens within five years of the date of the last sale of such tokens,” according to the text of the bill.
“This section does not apply to impossible tokens creating less than 100 impossible tokens that are considered part of the same series or class, or that such inappropriate tokens that are being considered part of the same series or class, are valued at less than $20,000 at the time of lag pull.
On the other hand, unauthorized access or misuse of private keys is criminalized unless express consent is given.
The bill also requires developers to publish token holdings on their primary websites to increase transparency.
If enacted, the law will become effective 30 days after it is passed, and there are provisions for preventive groups to implement enforcement measures before they come into effect.
Through this bill, New York State Senators hope to create a safer environment for investors while holding bad actors accountable.
The bill aims to prevent the widespread fraud that has plagued the crypto industry in recent years. Investors have lost millions due to misleading projects and sudden liquidity withdrawals.
If passed, serious penalties will be imposed on individuals and businesses engaged in deceitful cryptocurrency practices, including fines of up to $5 million and sentences of up to 20 years in prison. Nonnatural entities such as businesses can face fines of up to $25 million.
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