Saudi Press

Saudi Arabia and the world
Friday, Mar 29, 2024

The Crypto Ambitions of New York’s Next Mayor — and What Could Stop Him

The Crypto Ambitions of New York’s Next Mayor — and What Could Stop Him

Eric Adams’s embrace of crypto and his promise to make the city the center of the industry have generated excitement. He’s got his work cut out.
New York City Mayor-elect Eric Adams is already excelling at one major aspect of the job — cheerleading — at least as far as cryptocurrency is concerned.

Since his Nov. 2 victory, Adams has been selling New York as a crypto-friendly hub. The Brooklyn borough president and former cop has the support of crypto heavyweight Mike Novogratz of Galaxy Digital. He has opened up a jokey competition with fellow crypto-enthusiast and Miami Mayor Francis Suarez; suggested schools teach cryptocurrency and its technology; pledged to explore a mechanism to allow New Yorkers to be paid in virtual currencies; and even vowed to take his own first three paychecks as mayor in Bitcoin.

“This is a clear signal from me that I am not playing. We have become too afraid as a city we have become a culture of ‘no.’ We turn down everything,” Adams, 61, said in remarks to reporters last week while attending a conference in Puerto Rico. “This used to be a city where we led from the front.”

Adams’s public embrace of crypto and his promise to make the most populous U.S. city the center of the industry has generated plenty of excitement and even landed New York its own token. And in some ways, he will have a lot of control over what the city’s government looks like. Adams could appoint an aide and call them “crypto czar,” create a mayor's office of crypto currency or task a deputy mayor with promoting the industry, said John Kaehny, executive director of Reinvent Albany, a government accountability group. His power is limited beyond that. The state government sets the rules for the industry, the city's largest investment funds are out of his hands and changing payment processes require signoff from the City Council.

"He can certainly cheerlead for crypto a great deal and that's probably great for crypto but in terms of actually implementing things the chances are very very little to none," Kaehny said. "There are many, many practical obstacles."

During his run, Adams told Bloomberg News he wants to move the city onto an electronic cyber wallet instead of payroll checks and direct deposit, which would streamline payments for city workers and social benefit recipients while allowing the city to better track these monies.

Still, Adams has provided few details on how he plans to make these kind of things work. Evan Thies, a spokesperson for Adams, said the mayor-elect has no further comment on his crypto plans beyond what he has said publicly and will have polices and initiatives to announce closer to the start of his administration in January. His transition team includes Goldman Sachs Group Inc. Chief Financial Officer Stephen Scherr as well as Steven Choi, who runs the Novogratz-backed group One for Democracy.

Courting the crypto industry dovetails with Adams’s desire to present the city as open for business. New York already has one of the largest shares of crypto specialist jobs in the U.S., but the industry hasn’t yet settled on a single hub and other cities, such as Miami, Austin and Denver, are increasingly attracting talent.

One of the the incoming mayor’s biggest obstacles to making it easier for crypto companies to do business is a regulatory regime that’s one of the strictest in the U.S. It’s also one over which he’ll have no power, given the state’s control over virtual currency rules.

New York state requires industry participants, like exchanges and custodians, obtain a Bitlicense. That licensing process asks for financial disclosure, anti-money laundering compliance and cybersecurity compliance, among other requirements. Since the rules were implemented in 2015, roughly 30 companies have obtained a license or charter under the regime.

“New York state is perceived as one of the tougher states to establish a virtual currency business,” said Jeff Neuburger, a partner at Proskauer Rose LLP and head of the firm’s blockchain group. “It’s a fairly rigorous process for somebody to get a Bitlicense.”

New York has room to maneuver within the constructs of the state law and the licensing process doesn’t apply to investors or businesses that decide to accept virtual currency as payment, Neuburger said. However, it can’t loosen or make any run around that process.

In addition to the state laws, New York state Attorney General Letitia James has used her office to pursue virtual currency companies. James, who is running for governor in 2022, took action in February to bar Bitfinex and Tether from operating in the state for overstating their reserves, while fining the companies $18.5 million. A month later, she issued a warning to investors about the risks of the market, urging extreme caution for those who do participate, while also warning industry participants to register with her office.

That combination makes things tough for Adams and his ambitions for the city, said Mark Yusko of Morgan Creek Capital Management. “You don’t want your AGs to be negative crypto if you want to be a crypto city,” he said.

Despite the lack of details, industry participants are excited for a mayor who embraces the industry. A cryptocurrency project called CityCoins was searching for a second city to launch a token after unveiling MiamiCoin in August. It chose New York over Austin, Texas, after Adams spoke last week. The city-specific coin, which has produced more than $20 million for Miami so far, began mining in New York on Wednesday.

Wall Street — despite its sometimes public indifference, and even disdain, of the industry — is unlikely to be a major obstacle, said Justin Saslaw, a partner at Social Capital LP, a venture capital and private equity investment firm that invests in crypto.

“Wall Street isn’t going to put up a fight against the mayor,” Saslaw, who worked on a blockchain strategy group at Goldman in 2015, said. “Goldman, JPMorgan, Citi are three of the most active corporate venture capital participants in the crypto industry.”

At a basic level, positioning New York as a hub would bring jobs in a growing industry and economic activity to a city that Adams has pledged to revive. And it comes at the same time that Wall Street may be shrinking its footprint in the city.

“It would mean an influx of talent, the potential for an influx of tax revenue,” Morgan Creek’s Yusko said. “It won’t be easy because there are structural and logistical headwinds. But it’s not impossible.”
Newsletter

Related Articles

Saudi Press
0:00
0:00
Close
Reports in Gaza: 5 dead from the impact of aid packages dropped by the USA
Apple warns against drying iPhones with rice
China Criticizes US for Vetoing UN Ceasefire Resolution in Gaza
In a recent High Court hearing, the U.S. argued that Julian Assange endangered lives by releasing classified information.
The U.S. vetoed a U.N. Security Council resolution calling for a temporary ceasefire in Gaza, instead proposing its own six-week ceasefire plan contingent upon the release of all hostages held by Hamas
Prince William Urges End to Gaza Conflict
Saudi Arabia ranks first in UN index for e-government services in MENA
Israel has gone ‘beyond self-defence’ in Gaza, says Labour’s Streeting
EU Calls for Immediate Ceasefire in Gaza Conflict
Israel Records 20% Drop In GDP, War In Gaza Is The Reason
Saudi Arabia's FDI Inflows Grow with New International Standards
Venture Capitals Power Up Across MENA Region
Saudi Arabia Introduces Terms for 30-Year Income Tax Exemption for Multinational Companies
Saudi FM: Establishing Palestinian state is only pathway for Mideast stability
Russian opposition leader Alexey Navalny has died at the Arctic prison colony
Elon Musk's Starlink Gets License For Israel, Parts Of Gaza
Influencers Exploit X Platform for Profit Amidst Israel-Gaza Conflict
PM Modi Announces Opening Of New CBSE Office In Dubai
International Criminal Court's Chief "Deeply Concerned" By Rafah Bombing
January Funding for MENA Startups Totals $86.5 Million
Saudi Arabia accelerates digital economy growth through Nvidia partnership
Indian female military officers commend Saudi Arabia's progress and women's empowerment
Israel unveils tunnels underneath Gaza City headquarters of UN agency for Palestinian refugees
Israel deploys new military AI in Gaza war
Egypt threatens to suspend key peace treaty if Israel pushes into Gaza border town, officials say
Israel Utilizes AI Military Technology in Gaza Conflict
Saudi Arabia Warns Of A "Humanitarian Catastrophe" If Israel Moves On Rafah
China Warns Iran to Halt Houthi Attacks or Damage Trade Ties
US University To Shut Qatar Campus Due To "Heightened Mideast Instability"
Iran-backed hackers interrupt UAE TV streaming services with deepfake news
Facebook and Instagram Ban Iran's Supreme Leader
Finnish Airline, Finnair, is voluntarily weighing passengers to better estimate flight cargo weight
U.S. Secretary of State Blinken: The Israelis underwent dehumanization on 7.10, this does not give them the right to do this to others.
Defense Technology Showcase Held in Riyadh
Saudi Arabia’s non-oil exports rise 2.5% to $6bn in November 2023: GASTAT
UK Bans Misleading "Zero Emissions" Claims for Electric Cars
Gaza's Teen Inventor Sparks Light in Displacement
Netanyahu Rejects Ceasefire Proposal, Insists On Total Victory Over Hamas
Guterres appoints independent UNRWA review panel
Private Sector Employment Hits Record High with Over 11 Million Employees in January
Rolls-Royce Executive Encourages Saudi Women to Tap into Their Inner 'Superhero' for Success in Defense Industry
Saudi Arabia launches National Academy of Vehicles and Cars
Saudi Tourism Minister Reveals Plan for 250,000 New Hotel Rooms by 2030
SAR to more than double eastern network passenger capacity with new trains deal
Saudi Arabia Enhances National Defense with New Partnerships
Saudi Aramco Maintains Arab Light Crude Pricing to Asia for March
NEOM Establishes New York Office to Support Investors
Saudi Wealth Fund Draws in Over $25 Billion Worth of Investments in Three Years, Al-Rumayyan Reveals
ZATCA Cautions Against Scammer Schemes
INTRA Defense Technologies inaugurates drone factory in Riyadh
×