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New York State Representative Clyde Vanel proposed a bill attempting to legislate regulations around crypto scams. The bill defines a wide variety of crypto-related crimes as fraud, but it limits the resultant penalties.

The crypto community has responded positively to the effort, citing the unprecedented torrent of scams. Federal regulators have reduced their crypto enforcement lately, but legislative efforts could pass constructive new statutes.

New York Bill Plans Crypto Regulation

US crypto regulation is in limbo right now, and New York State Representative Clyde Vanel may be able to provide solutions. Since President Trump took office, federal regulators like the SEC have been claiming they don’t have jurisdiction over crypto enforcement and dropping a tranche of lawsuits.

To that end, Vanel proposed a new bill to clarify crypto regulation.

“Any person, partnership, corporation, company, trust or association, developer, or any agent or employee thereof who violates the provisions of this article shall be subject to a civil fine of not more than $5 million or imprisoned not more than twenty years, or both,” it read. These lesser fees apply to individuals, while organizations could face fines of up to $25 million.

Vanel’s crypto regulation bill sets an ambitious task for itself. The section on penalties is fairly boilerplate, but its various statutes define much of the entire Web3 industry.

The bill describes several distinct types of scams, thefts, and other criminal practices, legally defining them as fraud. These definitions don’t just apply to crypto; they also cover NFTs, blockchains, DeFi projects, and more.

Wave of Crypto Scams Continue to Harass the Community

So far, the crypto community has responded favorably to the bill’s proposed regulations. It’s easy to see why, as the community is stuck in an unprecedented wave of scams.

The largest crypto hack ever just happened, social engineering scams are raking in huge amounts, and fake political meme coin scams are being launched by sitting heads of state.

In short, the community is worried that these scams may damage crypto’s credibility. Therefore, a bill to actually hammer out beneficial regulations could be very useful.

Under Biden’s administration, federal regulators led the charge on crypto crimefighting, sparking fears of overreach. Maybe a legislative effort could change these perceptions.

Since Vanel filed this bill in New York, its proposed regulations could have a serious impact if passed. The state is a critical finance hub in the US, and New York-based prosecutors handle some of the biggest crypto crimes.

Vanel’s effort doesn’t even ascribe particularly harsh penalties; it’s more important to legally define these actions as fraud. Case in point, the Southern District of New York sentenced Sam Bankman-Fried to higher fines and jail time than Vanel’s bill would allow.

However, it’s still too early to say whether this bill may pass. The community’s initial reaction was positive, but other opinions may come to light.

Additionally, Vanel introduced this without any cosponsors. The Democrats hold a firm grasp on New York, so Republican cooperation is not necessary, but the bill may still die in committee.

The post NY State Bill Defines Civil Fine of Up To $5 Million for Crypto Scams appeared first on BeInCrypto.

Ripple has identified a critical supply chain attack on the XRP Ledger. This vulnerability doesn’t impact the entire Ledger, only DeFi wallets using the official xrpl.js package from NPM (Node Package Manager).

It’s unclear how much user money was compromised in this sophisticated attack, but Ripple claims that it deprecated the compromised packages. Several major DeFi wallets didn’t download this package, and no huge thefts have been reported yet.

Security Breach on the XRP Ledger

This XRPL breach was first identified by Aikido, a blockchain security firm. It found five suspicious updates to the xrpls.js package on Ripple’s NPM.

This is Ripple’s official software development kit, featuring more than 140,000 downloads weekly. Hackers installed a sophisticated backdoor into this package, enabling private key theft and wallet access.

A breach of this nature represents a dire threat to XRP, to the extent that Ripple CTO David Schwartz posted official warnings about it. Mayukha Vadari, a senior software engineer with the firm, also went into greater detail about the nature of this vulnerability.

At first, this might seem like a small issue, as the breach didn’t directly harm the XRP Ledger (XRPL). However, this hack was propagated through Ripple’s official channels, exposing many users to harm.

To get a sense of the scale, DeFi wallets on XRPL currently hold about $80 million in user deposits. Accessing a tiny chunk of this sum would indeed be a huge theft.

NPM is the distribution system, and compromising a high-trust package in it creates a powerful attack vector—a supply chain attack targeting developers and infrastructure rather than end-users directly.

A compromised NPM package can affect thousands of apps. When an attacker injects malicious code, like a backdoor, into a popular NPM package, any application or developer that installs or updates that package unknowingly introduces the malware into its own environment.

The XRP Ledger Foundation confirmed that several major DeFi wallets were not exposed and further stated that it deprecated the compromised xrpl.js versions. It also plans to publish a full postmortem analysis.

Also, hackers managed to compromise the official library for DeFi protocols that wish to interact with XRP. A sophisticated operation like that could have consequences.

The post Hackers Target Ripple’s XRP Ledger in a Critical Supply Chain Attack appeared first on BeInCrypto.