• Crypto regulation is advancing in New York as a Bill to protect users emerges.
  • At the Federal level, the US SEC is also pushing for investor protection with a new cyber unit.

Lawmakers in New York state are reviewing a proposed bill to fight crypto scams and rug-pull attacks. This Bill comes amid increasing efforts to protect retail investors from fraud involving new technologies.

Lawmakers Proposed Bill

According to reports from Blockbeats, the proposed bill, A06515, introduced by Assembly man Clyde Vanel, seeks to amend the New York Penal Law. This amendment would involve adding provisions specifically addressing fraudulent crypto sector activities.

The proposed bill aims to include major illegal activities, such as rug pulls, private key fraud, and scams involving undisclosed interests in virtual tokens. It would establish criminal penalties to prevent these crypto attacks.

Under the proposal, new criminal charges would be created, explicitly targeting deceptive practices associated with cryptocurrencies. Given the meteoric adoption of crypto, this bill emphasizes the need for proper security measures. With the huge profits experienced in the crypto market, the chances of bad players skyrocket.

Meanwhile, the bill comes after a rug-pull attack on the LIBRA coin endorsed by Argentine President Javier Milei. Notably, eight project-related wallets dumped $107 million through liquidity manipulation, raising questions regarding the project’s intent. Within hours, this triggered a 94% price collapse, wiping out investor capital worth about $4 billion.

As we reported earlier, investigations uncovered cross-chain transfers and suspicious wallet activity pointing to a single group controlling the LIBRA and MELANIA token launch. The findings, therefore, suggest coordinated pump-and-dump schemes by the same group.  

LIBRA, once envisioned as a revolutionary digital currency, now faces regulatory and reputational challenges. Globally, the LIBRA controversy has outraged crypto supporters, who are concerned that it damages the credibility of blockchain innovation.

Analysts highlight that the Milei-backed LIBRA scandal has exposed vulnerabilities in projects that rely heavily on celebrity endorsements and speculative hype.

More Efforts to Combat Crypto Scams

As crypto scams continue to increase, several agencies are intensifying their efforts to ensure that the blockchain arena becomes a safe space for users and investors. In our recent update, we examined the move by the US Securities and Exchange Commission (SEC) to launch the Cyber and Emerging Technologies Unit (CETU) to protect retail investors from fraud.

This team has a new emphasis on digital security, signifying a change from the past Crypto Assets and Cyber Unit. In addition to managing crypto fraud cases, they will pay more general attention to cybersecurity.

The government has formed alliances with multinational tech giants like Google and Meta to tackle crypto scams in India. Through the partnership, Google has included its payment system, Google Pay, in the national scam reporting system. On the other hand, Meta worked with government agencies to introduce instructional campaigns to increase public knowledge of online scams.