NY Cracks Down on Crypto Rug Pulls
New York Targets Crypto Fraud with Strict New Bill
New York State is taking significant action against cryptocurrency fraud. Assemblymember Clyde Vanel recently introduced Assembly Bill 6515, a bill designed to deter deceptive practices within the crypto space, particularly targeting rug pulls and private key theft.
Key Provisions of the Bill
- Rug Pulls: The bill defines and criminalizes rug pulls, focusing on developers who sell more than 10% of a token's total supply within five years of the last sale. Exceptions are made for smaller NFT projects with less than 100 NFTs valued under $20,000.
- Private Key Theft: Unauthorized access or misuse of private keys is criminalized, unless explicit consent is provided.
- Transparency Mandate: Developers are required to publicly disclose their token holdings on their primary website.
- Penalties: Individuals face fines up to $5 million and prison sentences up to 20 years. Corporations could face fines as high as $25 million.
The bill, if passed, will go into effect 30 days after its enactment. Regulatory bodies will have time to prepare enforcement measures before the effective date.
Protecting Crypto Investors in New York
This legislation underscores New York's commitment to creating a safer investment environment for its citizens. The significant penalties aim to discourage fraudulent schemes that have caused substantial losses for investors in recent years.
Codeum, a blockchain security and development platform, applauds this proactive approach. Our services, including smart contract audits, KYC verification, and custom smart contract development, are crucial in mitigating risks and building trustworthy blockchain projects. We believe that strong regulatory frameworks combined with robust security measures are essential for the long-term health and growth of the cryptocurrency industry.
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