New York Proposes Harsher Penalties for Unlicensed Crypto Operations

The New York State government has introduced a new bill aimed at regulating cryptocurrency operations within its borders. The proposed legislation, titled the CRYPTO Act, seeks to make unlicensed virtual currency activities a criminal offense.

The current regulatory framework in New York requires registration for crypto businesses through the BitLicense framework. However, there is currently no criminal penalty for ignoring this requirement, leaving operators free to operate without consequences.

The CRYPTO Act would change this by introducing graduated penalties for unlicensed operations, ranging from a Class A misdemeanor at baseline to a Class C felony carrying 5-15 years imprisonment for $1 million or more in a year. This shift in approach is seen as a response to the Trump administration's decision to disband its National Cryptocurrency Enforcement Team in April 2025.