New York CRPTO Bill Would Prohibit Many Digital Asset Activities And Impose Sweeping Market Structure Changes

On May 5, 2023, New York Attorney General Letitia James released a bill for consideration by the New York State Legislature that would implement comprehensive and far-reaching regulation of digital asset activities in the state.

If enacted as currently drafted, the Crypto Regulation, Protection, Transparency, and Oversight Act (the CRPTO Act) would, among other things, amend the New York General Business Law to (i) establish registration requirements for a number of categories of digital asset market participants; (ii) impose significant market structure reforms, effectively prohibiting the direct market access paradigm common in the digital asset industry; (iii) impose listing standards and disclosure requirements; (iv) target conflicts of interest, including in the context of digital asset "influencers"; and (v) expand and solidify the New York Attorney General's (NYAG's) enforcement tool kit with respect to digital asset markets. As currently drafted, the CRPTO