New York S 7824: Establishes certain offenses relating to crypto fraud

Bill Text

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S07824 Summary:

BILL NOS07824 

&nbsp

SAME ASSAME AS A06515-A

&nbsp

SPONSORLIU

&nbsp

COSPNSR

&nbsp

MLTSPNSR

&nbsp

Add Title K Art 191 §§191.00 - 191.20, Pen L

&nbsp

Establishes the offenses of virtual token fraud, illegal rug pulls and private key fraud.

Go to top S07824 Actions:

BILL NOS07824 

&nbsp

05/09/2025REFERRED TO CODES

01/07/2026REFERRED TO CODES

Go to topS07824 Committee&nbspVotes:

Go to topS07824 Floor&nbspVotes:

There are no Assembly votes for this bill in this legislative session.

Go to topS07824 Text:

 STATE OF NEW YORK
 ________________________________________________________________________

 7824

 2025-2026 Regular Sessions

 IN SENATE

 May 9, 2025
 ___________

 Introduced by Sen. LIU -- read twice and ordered printed, and when
 printed to be committed to the Committee on Codes

 AN ACT to amend the penal law, in relation to establishing certain
 offenses relating to crypto fraud

 The People of the State of New York, represented in Senate and Assem-
 bly, do enact as follows:

 1 Section 1. Title K of the penal law is amended by adding a new article
 2 191 to read as follows:
 3 ARTICLE 191
 4 CRYPTO FRAUD

 5 Section 191.00 Definitions.
 6 191.05 Penalties.
 7 191.10 Virtual token fraud.
 8 191.15 Illegal rug pulls.
 9 191.20 Private key fraud.
 10 § 191.00 Definitions.
 11 For purposes of this article, the following terms shall have the
 12 following meanings:
 13 1. "Virtual tokens" shall mean digital assets that exist on a block-
 14 chain;
 15 2. "Class" shall mean a group of fungible or non-fungible tokens,
 16 irrespective of the amount created, that is intended by the developer to
 17 be:
 18 (a) in the case of fungible tokens, valued and exchanged together; or
 19 (b) in the case of non-fungible tokens, regarded as part of the same
 20 group of digital or physical items or valued together with the develop-
 21 ers' other non-fungible tokens based on the fact that the non-fungible
 22 tokens were created by a certain developer, taking into account the
 23 developer's notoriety, sale volume, and how the developer is regarded
 24 within virtual token communities;

 EXPLANATION--Matter in italics (underscored) is new; matter in brackets
 [ ] is old law to be omitted.
 LBD09350-03-5

 S. 7824 2

 1 3. (a) "Developer" shall mean any person or entity that exercises
 2 significant influence or control over the creation, design, implementa-
 3 tion, or core functionality of a virtual token through:
 4 (i) creating or substantially contributing to the technical code,
 5 smart contracts, or protocols that define the token's functionality;
 6 (ii) having decision-making authority over significant technical
 7 changes or upgrades to the token or its underlying protocol; or
 8 (iii) being publicly identified as the founding team creator, or
 9 primary development team for the token;
 10 (b) The term "developer" shall not include persons who:
 11 (i) merely provide technical services under the direction of others;
 12 (ii) are passive investors who acquire tokens but do not participate
 13 in development; or
 14 (iii) contribute to open-source protocols through non-core development
 15 in a decentralized manner;
 16 4. "Non-fungible token" shall mean a virtual token used to denote on
 17 the blockchain ownership of any digital or physical item or any deriva-
 18 tive means thereof;
 19 5. "Fungible token" shall mean any virtual token stored on the block-
 20 chain other than non-fungible tokens;
 21 6. "Own", "owning" and "ownership" shall mean the means by which
 22 possession of a digital asset is noted on the blockchain or any deriva-
 23 tive means thereof;
 24 7. "Wallet" shall mean a device, program, or service which stores the
 25 public and/or private keys for virtual token transactions;
 26 8. "Burning" shall mean any method of someone making tokens inaccessi-
 27 ble to any person including themself with the intention of doing so;
 28 9. (a) "Rug pull" shall mean the act of a developer with respect to a
 29 class of virtual tokens where such developer, with intent to defraud:
 30 (i) creates material misrepresentations or omissions regarding the
 31 development, utility, or intended purpose of the virtual tokens; and
 32 (ii) subsequently sells a significant portion of their token holdings
 33 or abandons the proj