Briefly
- Manhattan DA Alvin Bragg and New York State Senator Zellnor Myrie launched the CRYPTO Act on Thursday to criminalize unlicensed digital foreign money operations.
- The invoice creates graduated penalties from Class A misdemeanor to Class C felony, with most sentences of 5 to fifteen years in state jail.
- New York presently imposes solely civil penalties on unlicensed operators, in contrast to federal legislation and 18 different states that already criminalize such exercise.
New York prosecutors are urgent lawmakers to show unlicensed crypto operations right into a jailable offense, noting that civil fines alone have failed to discourage a rising underground economic system fueled by crypto.
Launched by Manhattan District Legal professional Alvin Bragg and New York State Senator Zellnor Myrie on Thursday, the CRYPTO Act—quick for Cryptocurrency Regulation Yields Protections, Belief, and Oversight—would impose felony penalties on digital foreign money companies working with out state licenses, in keeping with a Thursday assertion.
“Crypto is the go-to means for unhealthy actors to maneuver and conceal the proceeds of crime.” – D.A. Bragg. Watch right here to be taught extra about our new invoice with @SenatorMyrie to fight using cryptocurrency to commit crimes and launder proceeds. pic.twitter.com/G3JMKShqfC
— Alvin Bragg (@ManhattanDA) January 15, 2026
The invoice would increase violations that presently carry solely civil fines to felony offenses with graduated penalties starting from a Class A misdemeanor to a Class C felony for companies dealing with $1 million or extra in cryptocurrency inside one yr.
A Class C felony conviction carries a most sentence of 5 to fifteen years in state jail, in keeping with the assertion.
Bragg stated the enlargement of crypto has enabled “a shadow monetary system” that permits criminals to maneuver and conceal illicit funds with ease.
“It’s long gone time for companies that function with no digital foreign money license and flout due diligence necessities to face felony penalties,” the DA stated within the assertion.
The measure addresses a rising enforcement hole as crypto more and more facilitates felony exercise whereas unlicensed operators face minimal penalties.
New York and crypto
Not like federal legislation, which permits as much as 5 years in jail for unlicensed cash transmission, New York presently imposes solely civil penalties on violators, with eighteen different states already criminalizing unlicensed crypto operations.
Talking at New York Legislation Faculty on Wednesday, Bragg framed crypto enforcement as a second-term precedence alongside weapons and shoplifting, warning legislators that criminals exploit regulatory blind spots to launder proceeds from weapons, medication, and fraud.
"Nothing new is being outlawed. Crypto shouldn’t be banned, DeFi shouldn’t be banned, and customers should not being focused. The principles about who wants a license exist already. What adjustments is the consequence for ignoring these guidelines," Nicolai Søndergaard, Analysis Analyst at Nansen, advised Decrypt.
Søndergaard warned that introducing felony penalties whereas regulatory boundaries stay unclear might push corporations to behave conservatively or keep away from New York altogether, making the business extra institutional and “extra cautious, extra bank-like,” even because it cleans up unlicensed operators and reduces regulatory arbitrage.
Final yr, former New York Metropolis Mayor Eric Adams referred to as for scrapping New York’s BitLicense at a serious Bitcoin convention in Might, saying the regime had turn out to be a barrier to crypto innovation and funding.
Launched in 2015, the BitLicense requires crypto companies working in New York State to fulfill strict compliance requirements geared toward shopper safety, with software and compliance prices that may run from roughly $5,000 to properly over $100,000.
Adams, who famously transformed his first three mayoral paychecks into Bitcoin and Ethereum in 2022, lately got here underneath scrutiny over NYC Token, a Solana-based crypto he promoted that briefly hit a $600 million market cap earlier than crashing amid allegations {that a} linked pockets siphoned almost $1 million in liquidity.
