Manhattan DA Pushes Criminal Penalties for Unlicensed Crypto Operators

Manhattan District Attorney Alvin Bragg has initiated a concerted effort to increase the legal severity applied to unlicensed cryptocurrency businesses operating within New York City. The DA’s office is strongly advocating for the use of state criminal statutes, traditionally aimed at illicit banking and money transmission, against operators who bypass New York’s rigorous BitLicense requirements.

Bragg argues that companies and individuals exchanging fiat currency for virtual assets—or vice versa—are acting as unlicensed money service businesses (MSBs), a practice that should carry significant criminal penalties, rather than merely civil fines typically levied by regulatory bodies such as the New York Department of Financial Services (NYDFS).

This push comes amid a broader regulatory environment attempting to grapple with the proliferation of decentralized finance (DeFi) and digital asset exchange platforms. The DA’s focus is primarily on consumer protection and mitigating the risk of money laundering, fraud, and sanctions evasion facilitated by platforms that deliberately avoid regulatory oversight.

The initiative signals a shift toward utilizing the full force of criminal law as a deterrent, setting a precedent that operating an unregistered crypto exchange in the jurisdiction can lead to serious felony charges, including counts related to running an unauthorized banking operation or engaging in pattern crime activity. Legal experts note that this aggressive stance is likely to increase the pressure on both domestic and international crypto entities handling New York resident transactions without proper state authorization.

Source: Manhattan DA Pushes Criminal Penalties for Unlicensed Crypto Operators