New York’s Alert: Ahead for Unlicensed Crypto Businesses

In the fast-moving world of cryptocurrency, New York has long been a tough regulator. Now, a new bill could change everything. On January 14, 2026, State Senator Zellnor Myrie introduced Senate Bill S.8901, called the Cryptocurrency Regulation Yields Protections, Trust, and Oversight Act – or CRYPTO Act for short. This proposal aims to make it a crime to run a crypto business in New York without the right license.

This is big news for crypto firms. New York is a major hub for finance and crypto. If passed, the bill would add jail time to the risks of skipping a license. Let’s break it down step by step, what it means, and what businesses should do next.

What Does the Propose?

The bill targets “virtual currency business activity.” This includes things like buying, selling, storing, or transferring crypto for others – especially if it involves New York residents or happens in the state.

Right now, companies must get one of two approvals from the New York Department of Financial Services (NYDFS):

• BitLicense: A special license for crypto activities.
• Limited Purpose Trust Charter (LPTC): A banking-style charter for trust companies handling crypto.

Without these, it’s been mostly civil fines so far. The would make it criminal. Penalties would scale up based on how bad the violation is:

Civil fines would still apply too. This graduated system gives prosecutors strong tools.

Why Now? Support from Key Leaders

Senator Myrie teamed up with Manhattan District Attorney Alvin Bragg to announce the bill. Bragg said it’s “long past time” for unlicensed firms to face criminal charges. They point to rising crypto crimes: fraud, money laundering, and scams hitting seniors and others.

Bragg has been vocal. Just before the announcement, he warned about risks from crypto ATMs in stores, peer-to-peer exchanges, and mixers. These tools can hide illegal funds, fueling a “shadow financial system.”

New York wants to lead on consumer protection. If passed, it would join 18 other states that already treat unlicensed crypto like a crime. It matches federal rules too, where unlicensed money transmission can lead to charges under 18 U.S.C. § 1960.

New York’s Tough Crypto Rules: A Quick History

New York set the bar high with the BitLicense in 2015. It’s strict, requiring strong anti-money laundering (AML) checks, cybersecurity, and consumer protections. Many big names like Coinbase and Gemini got it, but others left the state.

Getting licensed costs time and money – fees start high, plus legal and tech upgrades. Applications can take months or years. Some firms operate anyway, betting on civil fines only.

But federal shifts add pressure. In April 2025, U.S. Deputy AG Todd Blanche issued a memo. It says feds won’t prosecute unlicensed money transmission unless the violator knew the rules and broke them on purpose. States like New York can still act.

What This Means for Crypto Businesses

If you’re in crypto and touch New York:

1. Audit Your Operations: Do you serve NY users? Handle NY IP addresses? Even remote work counts.
2. Check Licensing: Federal BSA registration or other state licenses won’t save you. NYDFS rules are separate.
3. Weigh the Costs: Licensing is hard, but jail is worse. Reputational damage could kill your business.
4. Plan for Expansion: Eyeing NY? Start the process now.

Small P2P traders, ATM operators, and DeFi platforms could get hit hardest. Mixers and privacy tools? Extra risk if linked to crime.

Broader Impact on the Crypto Industry

New York isn’t just any state – it’s Wall Street. Strict rules here influence the nation. The signals more enforcement, not less. Expect NYDFS to ramp up audits and fines too.

Good news? Clear rules build trust. Licensed firms stand out as safe. It could attract big money if compliance becomes standard.

But critics say it stifles innovation. High barriers push startups away, slowing growth. Watch for industry pushback as the bill moves through the Senate.

Next Steps: Stay Ahead of the Curve

Track the bill’s progress on the NY Senate site. Public hearings could come soon. If enacted, enforcement might start fast, backed by DA Bragg’s office.

Businesses should:

• Get legal advice on NYDFS compliance.
• Build strong AML/KYC systems.
• Document all efforts to follow rules.
• Consider partnerships with licensed entities.

Crypto’s future in New York looks regulated – and risky without a license. Don’t wait for charges. Act now to protect your operations.

Final Thoughts

The underscores one truth: Compliance isn’t optional in crypto’s biggest markets. New York’s move could set a model for others. For firms everywhere, it’s a wake-up call. Prioritize licensing, monitor laws, and build ethically. The blockchain world thrives on trust – lose that, and you’re out.

Stay tuned for updates as this story develops. What do you think – fair regulation or overreach? Share in the comments.