Key Insights:

• On Wednesday, New York lawmakers shifted their attention to illegal activity in the digital asset space.

• A new bill aims to make crypto rug pulls illegal in the State of New York.

• Earlier this week, Bitcoin (BTC) mining was in focus, with New York taking steps to clean up crypto mining.

New York State appears to be placing increased attention on digital assets this year. Illicit activity has risen sharply this year.

In recent months, governments and regulators have called for the increased scrutiny of digital assets.

New York State lawmakers have been busier than most this week. On Wednesday, lawmakers looked to curb illicit activity with a new bill aiming to classify crypto rug pulls as criminal activity.

New York State Lawmakers Introduce a Bill to Target Rug Bulls

On Wednesday, Kevin Thomas introduced Senate Bill S8839, which,

“Establishes the offenses of virtual token fraud, illegal rug pulls, private key fraud, and fraudulent failure to disclose interest in virtual tokens.”

As a result of a rise in illicit activity that has included rug pulls and hacks, lawmakers are introducing a legal framework to target cybercriminals.

Several rug pulls hit the crypto news headlines in recent months. There have also been some sizeable hacks, with North Korean and Russian cybercriminals targeting exchanges and holders of cryptos and NFTs.

The penalties for violating the provisions of the bill include “a civil fine of not more than five million dollars or imprisoned not more than twenty years, or both, except where such a person is a person other than a natural person, a fine not exceeding twenty-five million dollars.”

A natural person is an individual human being, while a legal person could be a private or public company.

At the time of writing, lawmakers had yet to debate Senate Bill S8839.

New York Looks to Build a Legislative Digital Asset Framework

The latest bill follows in the footsteps of Assembly bill A7389C. On Wednesday, FX Empire reported on Assembly bill A7389C that,

“Establishes a moratorium on cryptocurrency mining operations that use proof-of-work authentication methods to validate blockchain transactions; provides that such operations shall be subject to a full generic environmental impact statement review.”

The bill went on further to say that, for a period of two years, the Department of Public Service will not approve a new application or issue a new permit for “an electric generating facility that utilizes carbon-based fuel and that provides, in whole or in part, behind-the-meter electric energy consumed or utilized by cryptocurrency mining operations that use proof-of-work authentication methods to validate blockchain transactions.”