Manhattan District Attorney Alvin Bragg urged state lawmakers Wednesday to criminalize unlicensed crypto operations, warning that a $51 billion criminal economy is thriving in regulatory blind spots that let criminals launder gun, drug, and fraud proceeds with impunity.
Speaking at New York Law School on Wednesday, Bragg laid out crypto enforcement as a second-term priority alongside guns and shoplifting, demanding legislators close loopholes that allow unlicensed operators to evade prosecution despite facilitating massive money laundering operations.
“We need systemic accountability like on steroids here,” Bragg said. “In fact, actually, I want you to be a little scared. And then to write your assembly person or senator about the fix, the prescription we have.”
Bragg zeroed in on unlicensed crypto ATMs that charge 20% fees to convert dirty cash into digital assets.
“They know you’re laundering gun proceeds,” he said. “And they do it without necessarily asking you.”
While Manhattan prosecutors have cracked cases, including a $5 million unlicensed Bitcoin ATM operation and terrorism financing schemes, Bragg said investigators can’t rely on criminals making mistakes.
“We shouldn’t need someone to slip up and use a traditional bank,” he said. “There are people far wiser than the one who bragged on Facebook Messenger.”
Bragg called for mandatory licensing and know-your-customer requirements for all crypto businesses, backed by criminal penalties.
“If you are operating a crypto business, if you are transferring, trading, moving, whatever verb you wanna use, virtual currency, you should be licensed,” Bragg said. “It’s that simple.”
The proposal would make New York the 19th state to criminalize unlicensed crypto operations, he said.
During the Q&A session, civil litigator Margo Hoppen raised concerns about recently widowed elderly New Yorkers having fallen victim to pig butchering schemes.
“We spent a lot of time trying to help people get stolen crypto back. It’s very hard,” he said, pointing to Senator Zellnor Myrie’s R.I.P.O.F.F. act as a potential solution that “would give us more tools to help people get stolen crypto back.”
Just this week, the U.S. Attorney’s Office in Massachusetts filed a civil forfeiture action on Monday seeking $200,000 in USDT stablecoin from a Tinder-based pig-butchering scam targeting a Massachusetts resident.
“When prosecutors like Alvin Bragg say crypto crime will be a priority, the most important question is whether law enforcement has the tools and expertise to turn that focus into real outcomes,” Ari Redbord, a former Treasury Department official now serving as global head of policy at blockchain intelligence firm TRM Labs, told Decrypt.
Citing the TRM Labs Crypto Crime Report, which shows 2025 was a record year for illicit activity, with roughly $158 billion in illicit crypto flows and about $2.7 billion lost to hacks, and a rise in violent “wrench attacks”—a level of activity, he said that underscores why crypto is “no longer a niche issue” but firmly embedded in the broader criminal ecosystem.
Redbord framed “prosecutorial focus on crypto crime” as a question of “capacity, not just intent,” saying the real outcomes depend on “investing in blockchain forensic tools,” building “technical fluency” among investigators and prosecutors, and ensuring courts are “comfortable with digital-asset evidence”—using the technology’s “transparency” to “hold criminals accountable at scale.”
