TechDigits

Tech news
Sunday, Jun 04, 2023

Analysis: Crypto companies bet new mayor will make New York digital asset hub

Analysis: Crypto companies bet new mayor will make New York digital asset hub

With U.S. cities such as Miami and Austin trying to court digital asset companies, John Wu was unsure whether to make New York City the permanent home of his cryptocurrency and blockchain start-up Ava Labs - until Eric Adams was elected mayor in November.

Wu said the election of Adams, a bitcoin-enthusiast who has pledged to turn the Big Apple into a crypto hub, played "a big part" in his decision to set-up a permanent office in New York City in November.

"Knowing that we have an administration that's friendly, especially in the New York City area, is going to be very helpful," said Wu, president of the company.

Adams was sworn in this month and has a lot of work to do make New York as welcoming as other would-be crypto hubs. New York state has stiff regulations for crypto companies, including a costly licensing requirement, and the state attorney general is cracking down on some companies in the sector.

Still, Wu and other cryptocurrency executives said the mayor's friendly stance could draw digital asset start-ups keen to assert their legitimacy alongside traditional Wall Street companies and to tap the financial hub's deep talent pool and investor base.

Chainalysis, a cryptocurrency data platform, also doubled down on New York City in 2021, signing a lease in August for a Manhattan office space that will accommodate up to 200 staff.

"The new mayor's support for the industry strengthens my conviction that New York is the best place for Chainalysis's headquarters," Michael Gronager, chief executive and co-founder of Chainalysis, told Reuters in a statement. "We plan to tap into the city's deep talent pool for our next phase of growth,” he added.

With the digital asset industry growing fast and the value of cryptocurrencies surging - surpassing $3 trillion in November - many jurisdictions want a slice of the action.

During his campaign, Adams expressed interest in developing a digital wallet for city employees and recipients of public benefits. Following his election, he pledged to take his first three paychecks in bitcoin and suggested that New York schools teach courses on cryptocurrency and blockchain technology.

"NYC is going to be the center of the cryptocurrency industry...Just wait!" he tweeted in November.


Adams has yet to propose specific policies that would give crypto companies an incentive to set-up in New York, unlike other cities like Miami and Austin whose marketing has highlighted their low energy costs and competitive tax rates.

The mayor's office did not respond to a request for comment, but Adams has said he hopes his crypto-friendly stance will attract more tech talent to the city, and many executives believe it will.

“I think it's a very effective signaling tool to ... say, 'Okay, we recognize that this industry can benefit everyone,'” said Zach Dexter, chief executive of FTX U.S. Derivatives, a crypto derivatives exchange based in Miami.

REGULATORY ROADBLOCK?


It remains unclear whether Adams can work from City Hall to reshape state regulations the virtual currency industry has decried as overly stringent and expensive.

"He can be a cheerleader,” said Stephen Gannon, an attorney at Murphy & McGonigle. "But mostly the regulatory environment is driven by the state."

New York Attorney General Letitia James has shut down crypto lending platforms, saying they must register with her office just like other lending platforms operating in the state or offering products to New Yorkers.

New York also requires most digital currency-related companies to obtain a "BitLicense" and comply with know-your-customer, anti-money laundering, and capital requirements. The New York Department of Financial Services (NYDFS), which did not respond to a request for comment, has granted only 20 licenses.

"Adams' comments do provide more confidence for us," said Haohan Xu, CEO of New York-based digital asset trading network Apifiny. "However, for all crypto companies located or are looking to be in NYC, the focus is still on the BitLicense."

While the BitLicense is a hurdle for some, Adams could offset costs through other incentives, such as commercial tax breaks.

Matt Homer, the former head of innovation at NYDFS, said Adams could have some sway over state crypto rules, especially since Governor Kathy Hochul has pledged to work with him on business issues.

"I think he could potentially... have an influence on regulation," said Homer, currently an executive in residence at venture capital firm Nyca Partners.

Hochul's office did not respond to a request for comment.

New York will have to compete with other crypto-friendly states and cities. Colorado, for instance, passed a law in 2019 exempting digital currencies from certain securities rules. Wyoming has created a special purpose charter for crypto companies.

Miami Mayor Francis Suarez, with whom Adams has already established a friendly rivalry on Twitter, is also courting crypto companies, touting lower taxes and living costs.


Crypto executives say there is room for more than one city to emerge as crypto destinations given the sector's booming growth. Dexter pointed out that New York has already managed to draw tech talent from Silicon Valley, which could also help give Adams an edge.

“There's this opportunity to have a few crypto capitals," said Dexter. “I think he is going to have some success."

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

TechDigits
Close
0:00
0:00
Nvidia Joins Tech Giants as First Chipmaker to Reach $1 Trillion Valuation
AI ‘extinction’ should be same priority as nuclear war – experts
Prominent Hacker Forum RaidForums Suffers Substantial Data Breach
Nvidia CEO Huang says firms, individuals without AI expertise will be left behind
WPP Revolutionizes Advertising with NVIDIA's AI Powerhouse
TikTok Sues Montana Over Law Banning the App
Mobile phone giant Vodafone to cut 11,000 jobs globally over three years as new boss says its performance not good enough
Warren Buffett Sells TSMC Shares Over Concerns About Taiwan's Stability
'Godfather Of AI' Geoffrey Hinton Quits Google To Warn Of The Tech's Dangers
Vermont Man Charged with Stalking After Secretly Tracking Woman with Apple AirTag
Elon Musk Statements About Tesla Autopilot Could Be 'Deepfakes,' Lawyers Claim. Judge Evette Pennypacker Does Not Understand How Far and Advanced This Technology Became
AT&T's Successful Test of Satellite-Based Phone Call Raises Possibility of Widespread Coverage
Pulitzer Prize-winning journalist Seymour Hersh slams New York Times' pro-government stance and treatment of sources
Fox News Settles their case with Dominion Voting Systems for a staggering $787.5 MILLION
The G-7 aims to make global crypto regulations tougher
China and Brazil have signed a new deal that will allow them to trade in their own currencies, bypassing the US dollar as an intermediary
Elon Musk and Others Call for Pause on A.I., Citing ‘Profound Risks to Society’
U.S. charges FTX's Bankman-Fried with paying $40 million bribe
Fallen 'Crypto King' Who Owes Millions to Investors Was Kidnapped and Tortured
Regulators blame social media for SVB's rapid collapse: 'Complete game changer'
AOC explains why she opposes banning TikTok
Gordon Moore, a co-founder of Intel Corporation, died at 94
Donald Trump arrested – Twitter goes wild with doctored pictures
Credit Suisse's Scandalous History Resulted in an Obvious Collapse - It's time for regulators who fail to do their job to be held accountable and serve as an example by being behind bars.
Russian Hackers Preparing New Cyber Assault Against Ukraine
A brief banking situation report
Elon Musk Is Planning To Build A Town In Texas For His Employees
The Silicon Valley Bank’s collapse effect is spreading around the world, affecting startup companies across the globe
Market Chaos as USDC Loses Peg to USD after $3.3 Billion Reserves Held by Silicon Valley Bank Closed.
Banking regulators close SVB, the largest bank failure since the financial crisis
In a major snub to Downing Street's Silicon Valley dreams, UK chip giant Arm has dealt a serious blow to the government's economic strategy by opting for a US listing
It's the question on everyone's lips: could a four-day workweek be the future of employment?
Corruption and Influence Buying Uncovered in International Mainstream Media: Investigation Reveals Growing Disinformation Mercenaries
Being a Tiktoker might be expensive…
China's top tech firms, including Alibaba, Tencent, Baidu, NetEase, and JD.com, are developing their own versions of Open AI's AI-powered chatbot, ChatGPT
This shocking picture, showing how terrible is the results of the earthquake in Turkey
The desk of King Carlos Alberto of Sardinia has many secret compartments
Charlie Munger, calls for a ban on cryptocurrencies in the US, following China's lead
First generation unopened iPhone set to fetch more than $50,000 at auction.
Almost 30% of professionals say they've tried ChatGPT at work
Interpol seeks woman who ran elaborate exam cheating scam in Singapore
What is ChatGPT?
Tesla reported record profits and record revenues for 2022
Microsoft is finalising plans to become the latest technology giant to reduce its workforce during a global economic slowdown
Tesla slashes prices globally by as much as 20 percent
After Failing To Pay Office Rent, Twitter May Sell User Names
FTX fraud investigators are digging deeper into Sam Bankman-Fried's inner circle – and reportedly have ex-engineer Nishad Singh in their sights
TikTok CEO Plans to Meet European Union Regulators
U.S. Moves to Seize Robinhood Shares, Silvergate Accounts Tied to FTX
Coinbase to Pay $100 Million in Settlement With New York Regulator
×