New York Assemblymember Phil Steck has proposed legislation imposing a 0.2% excise tax on cryptocurrency transactions. The tax is projected to generate $158 million annually, with funds aimed at combating substance abuse in upstate New York, particularly in light of the opioid crisis. The funding will expand prevention and intervention programs in schools. The legislation comes amid a broader movement in some states to leverage tax revenue from crypto to aid educational initiatives. Currently, cryptocurrencies in New York are treated as cash equivalents for taxation, with already existing capital gains, gift, and estate taxes applicable to digital assets. Steck's bill also covers NFTs and stablecoins. Using Chainalysis data, Steck estimates a substantial volume of crypto transactions in New York, despite regulatory challenges in obtaining accurate statistics from the New York Department of Financial Services. The proposal reflects ongoing scrutiny regarding the cryptocurrency industry's vulnerability to fraud and scams, particularly in the wake of the high-profile collapse of crypto exchange FTX.

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