With a vote of 39-17, the Illinois Senate passed a regulatory bill aimed at restraining cryptocurrency fraud and protecting investors from deceptive practices, including deceiving cull pulls and misleading fee structures.
On April 10, the Chamber of Commerce passed Senate Bill 1797 (SB1797), also known as the Digital Assets and Consumer Protection Act, introduced by Senator Mark Walker in February.
The bill provides Illinois financial and professional regulators with oversight of digital asset business activities within the state.
Under the law, Illinois residents and entities engaged in digital asset businesses must register with the state’s financial regulator. The bill requires Crypto service providers to provide full advance disclosure of user fees and fees.
Building SB1797. sauce: Ilga.gov
“A person must not be restricted to engage in digital asset business activities or to be able to engage in such a way that he or she is not registered in this state under this article (…) or on behalf of, or on behalf of, or on behalf of, or on behalf of, resident,” the bill states.
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Walker previously highlighted the need to deal with crypto-related fraud in Illinois. In a post on April 4th, he said:
“The rise of digital assets has opened the door not only for economic opportunities, but also for bankruptcy, fraud and deceptive practices. We need to set standards for those who have evolved in the crypto business to ensure that we are reliable and honest actors.”
Illinois’ push for stronger surveillance follows a wave of insider-led fraud, with the famous memocoin meltdown that left retail investors with a major loss.
In March, New York aims to introduce Bill A06515 to establish criminal penalties to prevent cryptocurrency fraud and protect investors from ragpur.
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Memecoin scams cause momentum in regulation
One of the most notorious recent cases was the collapse of the Libra token, a mimecoin that was reportedly approved by Argentine President Javier Mairi. In March, the project insider retracted liquidity of more than $107 million, causing a 94% price crash, wiping out a market value of around $4 billion.
Libra token crash. sauce: Cobessy’s Letter
“All fraudulent activities” like insider fraud and Ragpur “are completely deceptive activities” “not only are they unethical, but clearly illegal and have case law to help enforcement,” Anastasija Plotnikova, co-founder and CEO of BlockChain Regulatory Firm, told Cointelegraph.
“In my view, these activities should fall firmly within the jurisdiction of law enforcement.”
The latest meltdown occurred on March 16th. This comes after Hayden Davis, co-creator of the official Melania Meme (Melania) and Libra Token, launched the Wall Street-inspired Token (Wolf) wolves.
sauce: Bubble map
A 99% price crash occurred after the token peaked at a market capitalization of $42 million, as more than 82% of the token supply was held by the same entity.
Argentinean lawyer Gregorio Dalbon asked for the publication of a red notice for Davis.
https://www.youtube.com/watch?v=TVMMJ6RR4SO
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