- New York Bill A06515 targets rug pulls, introducing criminal penalties for fraudulent crypto practices to protect investors.
- Libra token scam wiped out $4B, with insiders allegedly siphoning $107M in liquidity before a 94% price collapse.
- Solana-based scams led to $485M outflows, as investors moved funds amid rising concerns over fraudulent crypto projects.
Lawmakers in New York have proposed a bill aimed at safeguarding cryptocurrency investors from rug pull scams, where project insiders flee and take away investor money. Assemblymember Clyde Vanel, who leads the New York Assembly’s Banks Committee, introduced Bill A06515 on March 5. The suggested law aims to create criminal consequences for deceptive practices in the cryptocurrency market.
The legislation proposes additional criminal penalties for crimes related to “virtual token fraud,” focusing on misleading actions in cryptocurrency investments. Legislators stress the importance of regulatory supervision to tackle increasing worries about deceitful schemes that have led to substantial financial losses for investors.
Bill A06515 Seeks to Enhance Investor Safeguards
The legislation defines “virtual tokens” as both security tokens and stablecoins, while “security tokens” refer to any sort of fungible or non-fungible code that demonstrates ownership through transaction validation on a peer-to-peer network. The Act emphasizes the importance of creating legal consequences for people who engage in fraudulent activities in the bitcoin business.
The law is timed to coincide with recent investment losses in memecoin efforts. One of the most significant instances involved the Libra token, which received support from Argentine President Javier Milei. Project insiders reportedly removed over $107 million in liquidity, causing a 94% price crash within hours and erasing $4 billion in investor capital.
Solana-Based Scams and the Impact on the Market
The rise of Solana-based memecoin scams has resulted in significant capital outflows as investors seek safer options. Data from February indicates that over $485 million left the Solana ecosystem due to concerns over fraudulent projects.
Regulatory experts argue that rug pulls and similar scams should face strict legal action. Anastasija Plotnikova, co-founder and CEO of blockchain regulatory firm Fideum, highlighted the importance of law enforcement intervention. She noted that insider scams and fraudulent activities in cryptocurrency markets are illegal and should be subject to stronger oversight.
The introduction of Bill A06515 reflects an increasing push to regulate fraudulent practices in cryptocurrency investments. In light of the increased number of scams that have resulted in significant financial losses, lawmakers are stressing investor safety. The measure intends to hold cryptocurrency project insiders accountable and provide a legal framework to combat fraudulent activities in the changing digital asset world.
