Manhattan DA Pushes Criminal Penalties for Unlicensed Crypto Operators
New York prosecutors are seeking to make operating unlicensed cryptocurrency businesses a criminal offense, arguing that civil penalties have not curbed an increase in illicit crypto activity. The proposed CRYPTO Act, introduced by Manhattan District Attorney Alvin Bragg and State Senator Zellnor Myrie, would apply criminal penalties to unlicensed virtual currency firms, with offenses ranging from misdemeanors to Class C felonies for businesses handling over $1 million in crypto annually. Class C felonies carry sentences of five to 15 years in prison. New York currently only issues civil fines for unlicensed crypto operations, in contrast to federal law and 18 other states that already impose criminal sanctions. Bragg describes expanding crypto as enabling criminal money laundering, calling for tougher consequences for unlicensed operators to address enforcement gaps. Critics caution that criminal penalties amid regulatory uncertainty might deter businesses and increase industry caution. The state’s existing BitLicense regime, in place since 2015, has attracted criticism for its high compliance costs and perceived barriers to innovation, with calls from figures like former NYC Mayor Eric Adams to reform or eliminate it.
