New York Prosecutor Warns of Out-of-Control Crypto Crimes: Unlicensed Crypto Businesses May Face Criminal Charges as Regulatory Focus

On January 15, New York Manhattan District Attorney Alvin Bragg recently publicly called on state legislators to strengthen the cryptocurrency enforcement framework, pushing to formally categorize unlicensed cryptocurrency operations as criminal offenses. He warned that a black market economy worth up to $51 billion is rapidly expanding within regulatory blind spots, with related illegal funds used for money laundering, firearms, drugs, and various scams. Cryptographic assets have become one of the key channels.

During a speech at New York Law School, Alvin Bragg explicitly stated that cryptocurrency enforcement has been listed as a core priority during his term, alongside combating gun crimes and theft cases. He emphasized that current legal loopholes allow unlicensed operators to assist in large-scale money laundering activities while often avoiding criminal liability. This phenomenon urgently needs to be curbed through legislative measures.

He specifically pointed out the issue of unlicensed cryptocurrency ATMs, noting that some devices charge fees as high as 20%, knowingly converting suspicious funds directly into digital assets, becoming a critical node in the crime chain. Although Manhattan prosecutors have already cracked several related cases, including an unlicensed Bitcoin ATM operation involving $5 million and investigations into terrorist financing, he admitted that law enforcement cannot rely on criminals “making mistakes.”

On policy recommendations, Alvin Bragg called for mandatory licensing for all cryptocurrency-related businesses and the full implementation of customer due diligence requirements, along with clear criminal penalties. He stated that if the relevant legislation passes, New York will become the 19th state to criminalize unlicensed cryptocurrency operations.

Additionally, addressing the frequent “pig slaughter” scam issues, the discussion also touched on the real challenge of elderly victims being the main target. Previously, U.S. law enforcement agencies initiated civil forfeiture procedures in a cross-state scam case involving USDT, highlighting the urgency of regulating crypto scams.

Ari Redbord, Head of Global Policy at blockchain security firm TRM Labs, pointed out that in 2025, the scale of illegal cryptocurrency activities has reached a record high, with approximately $158 billion in illicit funds flowing throughout the year. This indicates that crypto crime has deeply integrated into the traditional crime ecosystem. Future law enforcement effectiveness will depend on the deployment of blockchain forensic tools, the technical capabilities of law enforcement personnel, and the judicial system’s acceptance of digital asset evidence.