New York Prosecutor Pushes to Criminalize Unlicensed Crypto Operations

A senior New York prosecutor is urging state lawmakers to take a more durable stance on cryptocurrency crime, warning that regulatory gaps are permitting billions of {dollars} in illicit exercise to move by unlicensed platforms with little consequence.

Speaking at New York Law School on Wednesday, Alvin Bragg, the Manhattan district legal professional, known as on legislators to criminalize unlicensed crypto operations, describing a “$51 billion felony financial system” that exploits weak oversight to launder proceeds from weapons, medicine, fraud, and terrorism financing.

Bragg mentioned closing these gaps has develop into a core precedence alongside enforcement efforts concentrating on gun violence and arranged retail theft.

New York Prosecutor Warns Unlicensed Crypto ATMs Fuel Money Laundering

Bragg targeted closely on unlicensed crypto kiosks and ATMs, which he mentioned usually cost charges as high as 20% to convert money into digital belongings whereas asking few questions concerning the supply of funds.

According to Bragg, these machines have develop into a most popular instrument for criminals in search of to transfer soiled cash into crypto with out interacting with regulated monetary establishments.

“They know you’re laundering gun proceeds,” Bragg mentioned throughout his remarks. “And they do it with out essentially asking you.”

While Manhattan prosecutors have efficiently introduced instances involving unlicensed Bitcoin ATM operations and terror financing schemes, Bragg warned that present legal guidelines drive investigators to rely too usually on criminals making errors.

He argued that enforcement shouldn’t rely upon somebody by chance touching the normal banking system or boasting about their crimes on-line.

“We shouldn’t want somebody to slip up,” he mentioned. “There are folks far wiser than that.”

Bragg proposed necessary licensing and know-your-customer necessities for all crypto companies working in New York, backed by felony penalties for violations.

Any firm concerned in transferring, buying and selling, or facilitating the motion of digital belongings must be topic to the identical baseline oversight, he mentioned.

“If you might be working a crypto enterprise, you have to be licensed,” Bragg mentioned. “It’s that straightforward.”

If adopted, the measure would make New York the nineteenth U.S. state to criminalize unlicensed crypto operations, in accordance to Bragg.

Supporters argue such a transfer would strengthen client protections and provides prosecutors clearer authority to pursue instances tied to fraud and cash laundering.

New York Lawmakers Target “Pig-Butchering” Crypto Scams

During a question-and-answer session, issues have been raised about aged New Yorkers who’ve misplaced life financial savings to so-called “pig-butchering” scams, the place victims are groomed on-line earlier than being satisfied to ship crypto to fraudulent addresses.

Bragg acknowledged the issue of recovering stolen funds and pointed to proposed laws, together with Senator Zellnor Myrie’s R.I.P.O.F.F. Act, as a method to broaden restoration instruments.

The push in New York comes as federal authorities additionally escalate enforcement.

Earlier this week, US prosecutors in Massachusetts sought the forfeiture of $200,000 in USDT linked to a romance-based crypto rip-off.

As reported, crypto scammers defrauded victims of at least $9.9 billion in 2024, marking one of the crucial important monetary crimes of the 12 months.

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