Legislers in New York are getting up to combat crypto fraud by a new bill that criminalizes deceptive practices.
Assemblage Bill AO6515, introduced on March 5 by representative Clyde Vanel, tries carpets, private key fraud and unknown financial interests in virtual tokens.
Vanel, chairman of the banking committee and the subcommittee on the internet and new technology, has shown the need for stronger supervision as fraudulent activities rise in the crypto sector. (Note from the editors: scam that is specifically related to Cryptophishing has fallen by 48% in the past year.)
According to the account:
“With the progress of this new [crypto] Technology is of vital importance to establish regulations that are both in line with the spirit of the blockchain and the need to combat fraud. “
In view of this, the bill aims to impose legal consequences to developers and participants in industry that deal with misleading or exploiting behavior.
Bill Details
A primary focus of the bill is carpet tracts, scams in which developers or project insiders promote digital assets to artificially increase the value before they dump their participations, leaving investors losing behind.
If adopted, AO6515 would enable authorities to prosecute persons involved in such schemes and to tackle a growing problem that is intensified with the increase in memecoins.
Another important element of legislation is classifying private key fraud as an attack that is comparable to theft of payment cards.
This shift would impose stricter penalties on persons who have unauthorized or abuse access to private keys, which strengthens the protection for crypto users.
In the meantime, the bill also introduces strict disclosure requirements for participants in industry who keep interests in virtual tokens that they promote.
This provision would force developers to reveal the details of wallet and help investors detect potential conflicts and manipulation.
The bill stated:
“Unique wallet -property in every class of virtual tokens is critical information for investors to predict when a carpet pull or another type of virtual token manipulation will take place. Buyers have the right to know the degree of control about the price of virtual tokens that the developers have and the degree of consolidation of the tokens among the developers. “
The bill introduces serious fines for offenders, including civil fines of a maximum of $ 5 million for private individuals and $ 25 million for organizations. The bill also proposes prison sentences for up to 20 years for those convicted of serious violations.
