Lately, there have been news about the New York State Senator Kevin Thomas proposing a bill to criminalise Rug pulls and other crypto related scams with the intentions of protecting investors and to make sure the fraudulent activities of developers don't go unpunished.
This news brought up some questions between me and a colleague who kinda felt like the bill on Rug Pull was unnecessary because he felt Rug Pull wasn't a crime because the developers are just dumping their tokens/holdings. He also holds the belief that investors should always do their research before investing and should only invest with what they are willing to lose. While I don't agree with some of his point, we can categorically say that Rug Pull is unethical and is now a crime in New York which is a move I support.
While most people like my colleague may feel Rug Pull isn't a major problem in the country that needed concern, I feel the bill is actually quite important so Rug pulls and other fraudulent actions of developers wouldn't go unpunished. I was twice a victim of rug pulls and it really hurts when you invest your money and time in a project only to find out that the develeopers had other intentions and were well known Rug Pullers.
I made this colleague understand that this bill wasn't made to attack developers who had good intentions for their community and project, rather it is a way to protect and secure anyone dealing in any kind of project. The bill will not only ensure a lesser risk when dealing with cryptos but will also ensure the spontaneous growth of many projects.
Some important aspects of the bill worth noting are that the develepers are meant to declare their identity, declare how much holdings they have and how much holdings they have and will be created. Basically, this bill promotes transparency and honesty which are quite rare in the crypto space.
I personally felt Rug Pull was already a crime but now it's gonna be a crime worthy of persecution but just restricted to state of New York. Hopefully, there would be more bills like to guard and secure the interest of investors and to reduce fraudulent activities of some developers around the world.
Yes, rug pulls are absolutely a crime. Just like false advertising is.
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I agree. Rug pullers aren't honest people.
I thought Rug Pulling was an activity performed by rugby players at the pub after a game of rugger.
I didn't know they use it in the crypto space too.
Thanks for the article.
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Hahaha, no, it's different but you should still run away when you sense a Rug Pull.😅
I will activate Forest Gump mode for sure.
I lost money in a Rug Pull Project that was designed to stop rugpulls. They "verified" other coin projects by KYCing the team and also making them lock up Tokens. Unfortunately nobody was watching the watchdog haha
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That's sad, there are loads of the out there pretending to be the saints and taking advantage of people's trust.I hope you recovered well from it.
yes, it was a small amount and I also learned to never listen to Bitboy Crypto ever again haha ! He was the one who highlighted the Project
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It depends on how you define rug in the first place. Because devs dumping their stake on the market, isn't the same as if they intentionally left a code vulnerability to be exploited in the future. It's unethical, but restricting devs from selling their stake is hard to regulate.
On the other hand, If malicious developers defraud investors by limiting sell orders then it becomes clear what they had in mind, hence, should be considered a crime.
Crypto is still a wild west industry, so being careful and doing proper research might help you reduce the potential harm.
Due Diligence is the king.
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Truly, due diligence is king. I don't think dev selling their stakes is the problem, but devs selling their stakes which eventually crashed the project and brought loss to investors who had trust in them is the problem. Devs creating a malicious backdoor and creating more tokens for themselves without the knowledge of the investors is just wrong and this bill should help protect the interest of investors to a certain level.
This bill will probably help to curb scams and promote legit crypto projects that will bring about growth.
Also, doing proper research and not investing more than we can afford to lose will be a better way to stay above the tide.
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I totally agree with you, the bill was created for a good purpose and for legit projects to thrive well
See this is kind of the issue with that. People should be doing their own research before investing and also taking responsibility for their actions when investing. It comes with great risks. The last thing you want is governments and the SEC getting involved which is what people constantly cry about.
They are suppose to protect investors but they don't. People still get scammed left and right and the ONLY people left with the money is the SEC after all the battling and lawyering. It's a broken system and we would all be better off without it and take responsibility for the choices we make.
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The bill is to protect the investor,is not for one person.
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Exactly, that's what my colleague was missing.
Yes
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Yay! 🤗
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I called him a Rug Pull apologist and made him realise he's having a really bad mindset. Perhaps this is because he hasn't been a victim of Rug Pull. We talked later and I showed him the bill and explain better why Rug Pull is wrong and those behind it are selfish and should be regarded as criminals if they take certain actions. No one would invest in a project that they feel could have potential Rug Pulls.