New York Takes Aim at Unlicensed Crypto with Harsher Rules
New York is ramping up its efforts to combat unlicensed cryptocurrency operations. The state is proposing to make operating without a license a criminal offense, escalating from the current penalties that only include fines. This initiative is in response to the growing use of cryptocurrency in illegal activities and the inadequacy of existing penalties to deter the underground market.
The CRYPTO Act: A New Era of Penalties
The proposed bill, known as the CRYPTO Act, aims to criminalize the operation of a crypto business without a state license. Currently, the most severe consequence is a fine. However, under the new law, penalties could escalate from a misdemeanor to a felony, with the most serious offenders facing up to 15 years in prison.
Targeting the "Shadow Financial System"
The primary goal is to crack down on what officials refer to as a "shadow financial system." Cryptocurrency's anonymity and decentralization make it an attractive tool for criminals to move and hide money. The hope is that stiffer penalties will deter individuals and businesses from engaging in illicit activities.
New York Leads the Way
New York is not alone in this endeavor. Eighteen other states have similar laws in place. However, New York's approach differs from federal law, which also allows for prison time. The state aims to close the gap and ensure that crypto businesses operate within the legal framework.
Potential Impact on Businesses
There are concerns that these stringent measures could drive businesses away. If the regulations are too restrictive, companies might choose to avoid New York altogether. On the other hand, proponents argue that these measures are necessary to clean up the industry and protect consumers.
The BitLicense: A Precedent for Regulation
The BitLicense, introduced in 2015, already requires crypto businesses to meet stringent standards. However, some argue that it is too costly and stifles innovation. The new law is not about banning cryptocurrency but ensuring that all businesses comply with the rules.
