High-fee crypto ATMs are being used to launder illicit cash with minimal oversight.
A senior New York prosecutor is urging state lawmakers to take a tougher stance on cryptocurrency crime, warning that regulatory gaps are permitting billions of dollars in illicit activity to flow via unlicensed platforms with little consequence.
Speaking at New York Law School on Wednesday, Alvin Bragg, the Manhattan district attorney, known as on legislators to criminalize unlicensed crypto operations, defining a “$51 billion criminal economy” that exploits weak oversight to launder proceeds from guns, drugs, fraud, and terrorism financing.
Bragg stated closing those gaps has become a core priority alongside enforcement efforts focusing gun violence and organized retail theft.
New York Prosecutor Warns Unlicensed Crypto ATMs Fuel Money Laundering
Bragg targeted heavily on unlicensed crypto kiosks and ATMs, which he stated frequently charge fees as high as 20% to transform cash into digital assets at the same time as asking few questions about the source of finances.
As per Bragg, those machines have turn out to be a preferred tool for criminals looking to move dirty money into crypto without interacting with regulated monetary institutions.
“They know you’re laundering gun proceeds,” Bragg stated in the his remarks. “And they do it without always asking you.”
While Manhattan prosecutors have effectively introduced cases regarding unlicensed Bitcoin ATM operations and terror financing schemes, Bragg warned that recent law force investigators to depend on criminals making mistakes.
He claimed that enforcement have to not rely upon a person by accidentally touching the conventional banking system or boasting about their crimes online.
“We shouldn’t want a person to slide up,” he stated. “There are people a far wiser than that.”
Bragg proposed obligatory licensing and know-your-consumer necessities for all crypto businesses running in New York, backed by criminal penalties for violations.
Any corporation included in transferring, trading, or facilitating the movement of digital assets must be subject to the same baseline oversight, he stated.
“If you are running a crypto business, you have to be certified,” Bragg stated. “It’s that simple.”
If followed, the measure would make New York the nineteenth U.S. state to criminalize unlicensed crypto operations, in keeping with Bragg.
Supporters claim such a action would reinforce customers safety and provide prosecutors clearer authority to pursue cases tied to fraud and money laundering.
New York Lawmakers Target “Pig-Butchering” Crypto Scams
During a Q&A session, concerns were increased about elderly New Yorkers who have lost life savings to so-referred “pig-butchering” scams, where victims are groomed online before being satisfied to send crypto to fraudulent addresses.
Bragg recounted the difficulty of recovering stolen funds and pointed to proposed legislation, which includes Senator Zellnor Myrie’s R.I.P.O.F.F. Act, as a way to enlarge recovery tools.
The push in New York comes as federal government also increase enforcement.
Earlier this week, US prosecutors in Massachusetts sought the forfeiture of $200,000 in USDT connected to a romance-based crypto scam.
As reported, crypto scammers defrauded victims of at least $9.9 billion in 2024, marking one of the most substantial financial crimes of the year.
