Key Highlights
- Harsh Penalties Proposed: Introduced on March 5, 2025, by Assemblymember Clyde Vanel, Bill A06515 could imprison crypto fraudsters for up to 20 years and impose fines of $5 million for individuals or $25 million for organizations.
- Rug Pulls and Key Fraud Targeted: The legislation criminalizes rug pulls—barring developers from selling over 10% of tokens within five years—and equates private key fraud to PIN theft, aiming to curb scams exploiting investors.
- Transparency Mandated: A06515 requires developers to disclose wallet ownership to prevent manipulation, a move Vanel calls vital for investor trust, amid a 48% drop in crypto phishing but persistent rug pull risks in 2025.
New York lawmakers introduced a groundbreaking bill on March 5, 2025, aimed at curbing cryptocurrency fraud with severe penalties, including prison sentences of up to 20 years for offenders. Assembly Bill A06515, spearheaded by Representative Clyde Vanel, chair of the Assembly’s Banking Committee and Subcommittee on Internet and New Technology, seeks to criminalize deceptive practices like rug pulls, private key fraud, and undisclosed financial interests in virtual tokens. Unveiled amid a surge in crypto scams, the legislation signals a robust push to protect investors as the industry grapples with rising fraudulent activity.
Vanel emphasized the urgency of the measure, stating, “With the advancement of this new [crypto] technology, it is vital to enact regulations that both align with the spirit of the blockchain and the necessity to combat fraud.” The bill targets rug pulls—schemes where developers inflate token values before dumping their holdings, leaving investors with losses—as a primary focus. If passed, A06515 would impose legal consequences on project insiders who sell more than 10% of a token’s supply within five years of its last sale, a move designed to deter sudden exits that devastate retail holders.
Another cornerstone of the legislation is its treatment of private key fraud, equating it to debit card PIN theft under New York law. This shift would enable prosecutors to pursue harsher penalties for unauthorized access or misuse of private keys, bolstering security for crypto users. “This is about accountability,” Vanel told CryptoSlate, highlighting how the bill addresses a gap in protections that has left investors vulnerable. The proposal also mandates transparency, requiring developers and industry participants to disclose wallet ownership details publicly—a safeguard against hidden conflicts of interest and price manipulation.
Penalties under A06515 are steep. Individuals convicted of serious offenses could face up to 20 years in prison and civil fines reaching $5 million, while organizations might incur fines as high as $25 million. These measures aim to deter the kind of exploitative behavior that has plagued the crypto space, particularly with the proliferation of memecoins prone to insider dumps. “Unique wallet ownership is critical information for investors to predict rug pulls or other virtual token manipulation,” Vanel noted, underscoring the need for buyers to understand developers’ control over token supply.
The bill arrives as New York strengthens its stance on crypto regulation. While scams like crypto phishing have reportedly dropped 48% over the past year, according to bitcoinethereumnews.com, high-profile rug pulls continue to erode trust. The state’s move builds on earlier efforts, such as Attorney General Letitia James’s 2023 Crypto Regulation, Protection, Transparency, and Oversight Act, but A06515 takes a more punitive tack, prioritizing criminal accountability over civil oversight alone.
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