A new bill that proposes to criminalize certain offenses related to rug pulls and other crypto frauds were introduced by New York state legislators who have taken a tough stance toward the menace that has wreaked havoc in the digital space.
The Senate bill S8839 which was drafted by Sen. Kevin Thomas called for defining, penalizing, and criminalizing frauds specifically targeted at developers and projects that intend to dupe crypto investors.
The bill aims to provide prosecutors with a clear legal framework against crypto crimes. Besides that, it also calls for a law amendment that will imply rug pull charges on developers that sell “more than 10% of such tokens within five years from the date of the last sale of such tokens.”
Activities that are deemed as Private Key Fraud involve disclosing or misusing another person’s private keys without prior consent. The bill also seeks to charge developers with fraudulent failure to disclose an interest in digital tokens that don’t publicly disclose personal crypto holdings on the landing page of the primary website.
As of now, the bill is under committee review to determine its eligibility for floor consideration.
Another development that shows the growing concerns among the political class is when two members of the House of Representatives — California Representative Norma Torres and Arkansas Representative Rick Crawford recently introduced legislation to mitigate financial risks tied to El Salvador adopting Bitcoin as legal tender.
Proponents of the Bill hope that it will act as a deterrence for crypto fraudsters
A few days ago, The Federal Bureau of Investigation arrested a 37-year-old New York man on 20 April for allegedly defrauding more than a dozen victims out of a total of $1.8 million in a long-running crypto-mining scam.
Between March 2019 and September 2021, officials said Chester “Chet” Stojanovich posed as a dealer of crypto mining equipment, convincing his would-be customers to fork over large payments for mining machines and miner-hosting services, which the accused promised to arrange at a facility in Goose Bay in Canada’s Newfoundland and Labrador province.
According to a complaint, Stojanovich did not purchase as promised and kept the majority of the money for himself. Soon his luck ran out and was arrested in Champlain, N.Y. Stojanovich was charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison.