Legislation published this week in the US state of New York aims to curb rug pull and other forms of fraud that are unique to crypto.
Senate Act S8839 “fixes crimes of virtual currency fraud, rug pull, private key fraud, and fraudulent failure,” according to public records. The newly introduced bill, A8820, will act as a supplementary law. The bill was presented to the lower house of the New York State Legislature.
Bills were introduced by State Senator Kevin Thomas and Congressman Clyde Vanel, respectively.
Rug pull, a term referring to the sudden exit of a developer or founding team and the theft of investor funds, is a notable issue given the prevalence of these movements in the crypto space, particularly around NFTs. Last month, New York federal prosecutors filed charges against a pair of defendants in connection with the rug pull act of Frosties, a bogus NFT project.
New York legislation places limitations on the ability of such founding development teams to sell significant percentages of their token holdings over a five-year period.
was referred to the Draft Codes Committee.
The proposed law, if approved, will enter into force thirty days from the day it was approved.
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