A new crypto law introduced by Manhattan District Attorney Alvin Bragg and New York State Senator Zellnor Myrie would convert unlicensed virtual currency operations from a civil regulatory issue into a criminal offense, carrying up to 15 years in prison for operators moving $1 million or more in a single year.
Summary
The CRYPTO Act, or Cryptocurrency Regulation Yields Protections, Trust, and Oversight, was introduced January 14 and would add Section 408-b to New York’s Financial Services Law, creating a new offense of Unlicensed Virtual Currency Business Activity with graduated criminal penalties that currently do not exist at the state level
Charges scale from a Class A misdemeanor at baseline to a Class E felony for $25,000 or more within 30 days, and a Class C felony carrying 5 to 15 years imprisonment for $1 million or more in a year; 18 other states and the federal system already criminalize unlicensed crypto activity
The bill is a direct counter to the Trump administration’s April 2025 decision to pull back federal crypto enforcement, with Bragg positioning state prosecution as the necessary backstop where federal action has retreated
The announcement from the Manhattan DA’s office frames the legislation as a correction to the gap between New York’s existing BitLicense framework, which requires registration for crypto businesses, and the complete absence of criminal consequence for ignoring that requirement. Bragg told an audience at New York Law School that the crypto space needs accountability “on steroids.” Currently, unlicensed crypto operators in New York face only civil penalties. The CRYPTO Act would change that structure entirely, aligning the state with the majority of US jurisdictions that already criminalize the same conduct.
Any unlicensed virtual currency operation begins as a Class A misdemeanor. The charge escalates to a Class E felony once a business moves $25,000 or more within 30 days, or $250,000 or more in a year. A Class C felony, the top tier, applies to $1 million or more in a year and carries a maximum of 5 to 15 years in prison. Bragg made the stakes explicit: “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.”
Why New York Is Moving While Washington Steps Back
The Trump DOJ disbanded its National Cryptocurrency Enforcement Team in April 2025, directing federal prosecutors to focus on terrorism and drug cases rather than unlicensed money transmission or exchange level violations. Six Democratic senators have since challenged that decision as a conflict of interest. New York is moving in the opposite direction at the state level, asserting that the federal retreat has created a gap that state prosecutors must now fill using criminal law rather than civil penalties alone.
What the Bill Still Needs to Become Law
As crypto.news has reported, the federal regulatory framework for crypto is being built out under GENIUS Act implementation, with the FDIC, OCC, and Treasury each advancing separate rulemaking processes that apply only to licensed entities. As crypto.news has noted, the GENIUS Act’s compliance architecture leaves unlicensed operators in a regulatory blind spot, precisely the gap the CRYPTO Act targets through state criminal law. The bill still requires passage through the New York State legislature, and a legislative timeline has not been announced.
