HomeAltcoinTo avoid rug pulls, a New York senator proposes to regulate new...

To avoid rug pulls, a New York senator proposes to regulate new tokens. 

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source: The New York State Senate

Senator Kevin Thomas of the Democratic Party has submitted legislation to properly regulate new developments in order to minimize future rug pulls. Thus, he seeks to prohibit project creators from selling more than 10% of their tokens in the five years following the last sale, and he also wishes to penalize private key theft.

Rug pulls, going to be a thing of the past?

Rug pulls and other cryptocurrency scams to be properly controlled in the near future?

In any event, this is what Kevin Thomas, a Democratic senator from New York who is also the head of the Consumer Protection Committee and to whom Americans owe the New York Privacy Act (NYPA), a statute aimed at preserving their private lives.

The bill is subtitled as follows:

“Establish the offenses of virtual token fraud, illegal rug pulls, private key fraud and fraudulent non-disclosure of interest in virtual tokens. »

As a result, the law filed under the identity S8839 is specifically focused at project developers who want to escape with the fund, a scenario known as rug pull.

In his state, any project creator who sells more than 10% of the project’s tokens within five years after the last public sale date is guilty of unlawful rug pulling. It should be noted that rug pulls are already punishable on American land, but the suggestion to limit token sales in this manner is highly unique and might prevent many bad enterprises.

Private key fraud is analogous to bank card code theft in that a key, like a traditional wallet with the card code, provides access to an individual’s complete digital wallet.

A scenario determined as follows:

“A person, or A BOT, commits private key fraud when he gets or reveals to another person the private key of another person without his explicit agreement […]”

The text also alludes to developers who are setting up wallets with keyloggers, mechanisms that record the keys typed on a user’s keyboard.

Proposals are welcome.

We can only enthusiastically welcome such offers, because rug pulls are sadly prevalent, and many unscrupulous persons do not hesitate to prey on the gullibility of novices, promising mountains and miracles for the future of their token. . Senator Kevin Thomas defends this claim by citing the notorious rug pull of the “SQUID” token at the start of 2022:

“Famous examples include Squid Game Coin, which started at a price of $0.016 per token and soared to around $2,861.80 in just one week, before crashing to a price of $0.0007926 within five minutes of withdrawal. In other words, the creators of $SQUID received a 23,000,000% return on investment, and their investors were cheated out of millions. »

The bill also states that token project creators would be forced to identify the cryptocurrencies they own on their website homepage in order to report any conflicts of interest and increase openness to the broader public.

As of this writing, the measure is being studied by a committee to see if it will be heard during the session.

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