Crypto Law Update: New York Prosecutors Want to Make Running Crypto Without a License a Criminal Offense

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In a dazzling display of bureaucratic zeal, Manhattan District Attorney Alvin Bragg and New York State Senator Zellnor Myrie have introduced a new crypto law that would transform the act of running unlicensed virtual currency operations from a mere civil nuisance into something more thrilling-a criminal offense! For those audacious enough to move $1 million or more in a single year, the punishment could be as charming as 15 years behind bars. Because, of course, who wouldn’t want to bring the full force of the law down on those rascally crypto operators?

Let’s break down the exciting details, shall we?

  • The gloriously titled CRYPTO Act-short for Cryptocurrency Regulation Yields Protections, Trust, and Oversight-was birthed on January 14 and aims to add Section 408-b to New York’s Financial Services Law. This would establish a brand-new crime: Unlicensed Virtual Currency Business Activity. A crime with graduated criminal penalties, of course, because one penalty is never enough.
  • Charges start off innocently with a Class A misdemeanor. However, once you cross $25,000 in 30 days or $250,000 in a year, the stakes rise to a Class E felony. And just when you thought it couldn’t get more thrilling, a Class C felony is introduced for those particularly daring (or unfortunate) enough to move $1 million or more in a year. The reward for such bravado? A delightful 5 to 15 years in prison. Not bad, eh?
  • Oh, and did I mention that 18 other states and the federal system are already onboard with criminalizing unlicensed crypto activity? Seems like New York doesn’t want to be left behind.

So why this sudden surge of legislative energy? Bragg and Myrie frame this as a correction to New York’s BitLicense framework, which mandates that crypto businesses register but offers no criminal consequences for ignoring that. Bragg, ever the advocate for accountability, declared that the crypto space “needs accountability on steroids.” Currently, if you operate a crypto business without a license, you face a fine. But, with the CRYPTO Act, you could face something far more thrilling-prison. All in the name of aligning New York with other U.S. jurisdictions, which already criminalize such activities.

Crypto Law: How the Penalty Tiers Actually Work

Let’s talk about the penalty structure, shall we? It’s a tiered system that begins with a simple Class A misdemeanor. But once a business moves $25,000 or more within 30 days, or $250,000 or more in a year, that misdemeanor is upgraded to a Class E felony. And the grand finale? A Class C felony applies to those who move $1 million or more in a year, with a delightful 5 to 15 years in prison awaiting them. Bragg wasn’t shy about his intent: “Crypto is the go-to means for bad actors to move and hide the proceeds of crime. It is long past time for businesses that operate without a virtual currency license and flout due diligence requirements to face criminal penalties.” Seems harsh? Perhaps. But it’s for the greater good, I’m sure.

Why New York Is Moving While Washington Steps Back

The plot thickens! In April 2025, the Trump Department of Justice decided to disband its National Cryptocurrency Enforcement Team. Their new focus? Terrorism and drug cases. Naturally, six Democratic senators found this decision to be a tad suspicious and have challenged it. In a dramatic turn of events, New York has decided to step into the breach. While the feds retreat, the state is stepping forward to fill the gap, not with civil penalties, but with criminal law. Because why not make things a little more exciting?

What the Bill Still Needs to Become Law

As reported by crypto.news (because why wouldn’t we be reading that?), the federal regulatory framework for crypto is slowly taking shape under the GENIUS Act, with agencies like the FDIC, OCC, and Treasury creating rules for licensed entities. But, in a delightful twist, the GENIUS Act leaves unlicensed operators in a regulatory limbo-a gap the CRYPTO Act is aiming to fill with its criminal penalties. Of course, the bill still needs to pass through New York’s State legislature, but hey, it’s just a matter of time.

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2026-04-09 21:31