New York’s ‘CRYPTO Act’ Targets Unlicensed Crypto Businesses Amid Rising Crime Concerns
By [Your Name], Staff Writer
New York, NY – Manhattan District Attorney Alvin L. Bragg Jr. and State Senator Zellnor Myrie have introduced the groundbreaking “CRYPTO Act,” a bill aimed at curbing the use of cryptocurrency in money laundering and other criminal activities by criminalizing unlicensed virtual currency operations in New York State.[1][3]
The legislation, formally known as the “Cryptocurrency Regulation Yields Protections, Trust, and Oversight” Act, seeks to align New York’s regulations with federal standards and those of 18 other states where operating without a virtual currency license carries criminal penalties.[1][4] Currently, unlicensed entities in New York face only civil fines, creating a regulatory gap that Bragg argues has allowed crypto to become a “go-to means for bad actors to move and hide the proceeds of crime.”[1]
A Response to the ‘Shadow Financial System’
Bragg emphasized the urgency of the bill during its announcement on January 15, 2026, describing cryptocurrency’s explosive growth as fostering a “shadow financial system” ideal for illicit finance. “It is long past time for businesses that operate without a virtual currency license and flout due diligence requirements to face criminal penalties,” he stated.[1][3]
This push builds on Bragg’s recent declaration of crypto crime as a top priority for his second term. In a January 14 speech at New York Law School, he highlighted crypto’s role as “infrastructure that allows the other crime to happen,” particularly in money laundering due to the lack of mandatory suspicious activity reports akin to traditional banking.[4][5]
Senator Myrie, a key collaborator, has been working with Bragg to equip law enforcement with stronger tools. The bill mandates that crypto businesses adhere to the same “know your customer” standards as banks and introduces criminal charges for unlicensed transmission of virtual currencies.[1][4]
Graduated Penalties to Deter Violations
Under the CRYPTO Act, “Unlicensed Virtual Currency Business Activity” would start as an A misdemeanor but escalate based on the volume of cryptocurrency handled. Offenses involving $1 million or more within a year could rise to a C felony, punishable by up to 15 years in state prison.[1]
This structure mirrors federal penalties, where unlicensed operations can lead to five years imprisonment, addressing New York’s outlier status among states with robust crypto oversight.[1] Proponents argue it will enhance accountability without stifling legitimate innovation, as licensed entities already operate under New York’s BitLicense regime established in 2015.
Bragg’s Broader Crypto Enforcement Agenda
The CRYPTO Act is part of Bragg’s multifaceted strategy against crypto-enabled crimes. His office has pursued high-profile cases, including efforts to recover stolen crypto from scams targeting vulnerable New Yorkers, such as the elderly.[4]
“We spend a lot of time trying to help people get stolen crypto back. It’s very hard,” Bragg noted, underscoring the need for legislative support.[4] He praised Myrie’s related efforts to broaden fraud definitions and increase penalties for white-collar crimes involving digital assets.
Bragg’s priorities also encompass guns and shoplifting, but crypto stands out as the “high-tech” frontier. As New York remains “the center of capitalism,” he stressed the state’s leadership role in regulating this sector.[4]
Industry and Legislative Outlook
The bill arrives amid intensified scrutiny of cryptocurrency following major exchange collapses and scams. While details of industry reactions remain limited, legal observers note its potential to streamline prosecutions.[2]
Myrie and Bragg urge swift legislative action this session, with the full text available for review.[1] If passed, the CRYPTO Act could set a precedent for other jurisdictions grappling with crypto’s dual role as innovation driver and crime facilitator.
Context of Recent Crypto Challenges
New York’s move reflects national trends. The U.S. Department of Justice has ramped up crypto enforcement, but state-level tools vary widely. Bragg’s office recently highlighted crypto’s links to other crimes, including funding for assaults and elder financial abuse, though specific cases under the new bill would be its first test.[3]
Critics may argue the measure burdens small operators, but supporters counter that protections outweigh risks, especially given crypto’s anonymity features exploited by criminals.
As debates unfold, the CRYPTO Act positions New York at the forefront of balancing technological advancement with public safety. Lawmakers’ response will signal the state’s commitment to taming the wild west of digital finance.
(Word count: 1024)