New York defends old money as the crypto industry spends its golden years in brighter jurisdictions

Per Frank Corva

New York is a city of money.

In fact, let me rephrase this… New York is a old money city.

Home to Wall Street, New York City presents itself as the global center of finance.

But we live in an era now where finance is decentralizing via Bitcoin (BTC) and other cryptocurrencies.

This is not to say that the cryptocurrency industry is decentralized. Quite the contrary: the industry is full of centralized exchanges – platforms that provide customers with access to digital assets.

Many of these exchanges are not allowed to operate in the state of New York, thanks to something called BitLicense.

BitLicense

A BitLicense is a commercial license that cryptocurrency exchanges must obtain if they want to serve customers in the state of New York. Obtaining a BitLicense became a requirement for cryptocurrency exchanges wishing to operate in the state of New York as of August 2015.

It seems logical that such a license exists, but many in the industry who have sought to obtain a BitLicense have shared how difficult it is to obtain one.

These industry professionals explained that the administrative process to obtain a BitLicense is long, tedious and expensive. Some cryptocurrency exchanges have reported spending over $50,000 in efforts to obtain the license.

Essentially, New York State bureaucrats believed they could engage in efforts to create a protective moat around Wall Street.

In other words, some have speculated that when New York state lawmakers created the BitLicense, they did so out of fear that Bitcoin and other digital assets have the potential to drain money and influence from Wall Street’s hands.

But New York State shot itself in the foot by trying to protect its old financial guard.

What New York State officials and elected officials learned in the years prior to the creation of BitLicense is that many cryptocurrency exchanges were happy not to play New York State’s game.

Many cryptocurrency exchanges — platforms that sell assets designed to increase financial inclusion — have not only given up on serving New York State residents, but have also established their offices outside the state.

Some exchanges have opened offices in more welcoming jurisdictions, such as Miami.

Miami has been much friendlier to the cryptocurrency industry thanks to its forward-thinking mayor, Francis Suarez.

Miami, the new New York

A visionary leader, Suarez has turned Miami into a cryptocurrency city.

He did this by inviting not only entrepreneurs from the crypto space, but also talent from the financial sector from New York, along with professionals from the tech sector and venture capitalists from San Francisco. And he set it all in motion with a single tweet a year and a half ago.

Since then, Suarez has given Miami a Wall Street-style crypto bull to send a message that times are changing.

New York Mayor Eric Adams saw the writing on the wall (street) and proclaimed that he would make New York “the center of cryptocurrency” – an odd statement given the decentralized nature of digital assets. He also had his first three paychecks converted into BTC and Ether (ETH) to score a point – or at least put on a little show. Side note: Suarez receives all of his paychecks in Bitcoin.

Adams seems willing to pose as someone who is in favor of opening the doors of New York City to the cryptocurrency industry. He even called for an end to the “BitLicense scheme”. The problem is that few believe he means what he says.

Furthermore, Adams recently decided whether or not to support the recent New York State bill to ban specific Bitcoin mining operations. This – once again – undermines your credibility.

It seems Adams likes to say the things crypto supporters want to hear. We have yet to see any substantial action from him, however.

Bad Company

As a resident of New York State, when trying to open an account with some cryptocurrency exchanges, you receive a message explaining how the exchange does not serve jurisdictions including New York State, Iran, Syria and North Korea. Very nice to see New York in the company of such progressive places.

I can’t help but wonder what New York State politicians and bureaucrats really think about this. How much longer can they continue to pretend they are acting in efforts to protect customers when it looks like they’re just trying to protect Wall Street?

Fortunately, there have been a few soldiers in the cryptocurrency industry who have invested the time, effort, and money needed to obtain a BitLicense so that we crypto enthusiasts in New York State have ways to buy cryptocurrencies.

wake up, new york

Hopefully, the powers that be in New York State will soon wake up and realize how their actions have driven top talent in the burgeoning cryptocurrency industry out of state and how they have restricted New York State residents from purchasing specific digital assets available only in New York. exchanges barred from operating in the state.

If New York City intends to keep its brand as a “money city,” then the state government better recognizes the evolving nature of money and stops acting to protect the old, obsolete version of it.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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