New York legislators have introduced the law aimed at protecting cryptocurrency investors by targeting rug pull scams, where project insider suddenly turned away from a project and drain investor funds.
Assembly -Clyde Vanel, Chairman of the New York Assembly Bank Committee, introduced Bill A06515 on March 5. The bill will establish criminal penalties specifically aimed at preventing cryptocurrency fraud and protecting investors from pulling rugs.
Under the proposal, new criminal charges will be created for offenses involving “Virtual token Fraud,” clearly targets fraudulent skills associated with cryptocurrencies.
Bill A06515. Source: New York State Assembly
The “Virtual token” refers to security tokens and stablecoins, while “security tokens” include “any form of fungible and unobtrusive computer code where all forms of ownership of such a computer code are determined by verifying transactions or any derivative method, and stored it on a peer-to-peer computer network.
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The bill came shortly after the space began to experience widespread investor failure in Memecoins, especially after the launch of the Libra token, which Argentine president Javier Milei promotes.
Libra project insiders are said to stop over the surface $ 107 million worth of liquidity In a rug pulling, which sparked a 94% price collapse within a few hours and wipe $ 4 billion in the investor capital.
Libra token crashing. Source: Kobeissi letter
The growing waves of Solana -based scams led to a crypto capital flight to “safety,” resulting in the surface $ 485 million in flows For Solana in February.
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Rug pulls “must fall firmly within the jurisdiction of law enforcement”
Raising Memecoin-related scams presents significant regulation challenges, according to Anastasija Plotnikova, co-founder and CEO of blockchain regulatory firm Fideum.
Insider scams and “explicit deceptive activities” such as rug pulls, which are “not only unethical but also clearly illegal, with law cases to support implementation,” should see more thorough regulation, Plotnikova told cointelegraph. He added:
“In my view, these activities should fall firmly within the jurisdiction of law enforcement agencies.”
More disturbing revelation has emerged since the melting Milei-adopted by Libra token.
https://www.youtube.com/watch?v=TVMMJ6RR4SO
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