Manhattan District Attorney Alvin Bragg and New York State Senator Zellnor Myrie on Thursday proposed legislation called the "CRYPTO" Act that would make unlicensed cryptocurrency business operations a felony in New York, with penalties ranging up to 15 years in state prison for transactions involving $1 million or more annually.
What Happened: Criminal Penalties for Unlicensed Crypto Firms
The proposed law—formally titled "Cryptocurrency Regulation Yields Protections, Trust, and Oversight"—would transform existing civil sanctions for operating without a virtual currency license into criminal charges.
Under current New York rules, organizations that exchange, trade or transport cryptocurrencies must register for a virtual currency license, but violations carry only civil penalties.
The CRYPTO Act would establish a new offense category called Unlicensed Virtual Currency Business Activity. Penalties would scale based on transaction value: a Class A misdemeanor for smaller amounts, escalating to a Class C felony for operations involving $1 million or more within a year.
That felony charge carries potential sentences of 5 to 15 years in state prison.
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Why It Matters: Closing Regulatory Gaps
Bragg described the cryptocurrency industry as a "shadow financial system" that enables money laundering and other crimes. "Crypto is the go-to means for bad actors to move and hide the proceeds of crime," he stated.
Myrie said the bill would bring New York in line with 18 other jurisdictions that already criminalize unlicensed virtual currency transactions.
"As the use of crypto has grown, so has illicit activity," he said, adding that New York's status as a financial hub demands stricter oversight.
The proposal coincides with a Thursday letter from House Democrats—including Representatives Maxine Waters, Sean Casten and Brad Sherman—urging Securities and Exchange Commission Chair Paul Atkins to reinstate enforcement actions against digital asset firms.
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