Today, New York has been causing a lot of noise in the crypto industry. The U.S. state is renowned for its hostile stance against the nascent asset class.
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Some believed the election of Eric Adams as Mayor was going to push things in favor of cryptocurrencies, he ran on a pro-Bitcoin platform, but the opposite has taken place. Adams shifted his stance on digital assets, crypto mining, and other key issues for the space.
On a state level, things have been worse for this industry. As Bitcoinist reported, the NY State legislature enacted a bill that could limit Bitcoin mining across this region.
The bill is a result of concerns expressed by government authorities at the local and state levels, numerous environmental groups, and other organizations that claim Bitcoin mining has a negative impact on the planet. This is a statement that has been put into question by recent data.
New York’s Attorney General (AG) Letitia James echoed the position adopted by other U.S. government officials. Via her Twitter account, James called the crypto market “extremely unpredictable” and claimed the sector has seen “record lows” which have resulted in investors losing “hundreds of billions”.
James added the following to a statement that triggered a negative reaction across the industry:
New Yorkers should be cautious and think twice before putting their hard-earned money into this unstable market.
James began her mandate as AG on January 1st, 2019. At that time, Bitcoin was trading at around $3,500 after months on a downside trend.
Today, as James posted her statement, Bitcoin was trading north of $29,500 and the entire sector recorded a total market capitalization above $1.5 trillion. Since James assumed office, Bitcoin alone increase its price almost by 20x.
Will Crypto Be Forced Out Of New York?
Thus, investors in the industry pointed out not only that the sector has been trading at a multi-year high, but the government official’s statement only highlights the losses in this industry but omits the ones recorded by the traditional market.
Chief Strategy Officer (CSO) for investment firm Coinshares, Meltem Demirors, replied to AG James with the following statement:
Is it normal for an elected official to make investment recommendations? seems very… specific to focus a global ~$1 trillion market, and just gloss over the stock market, a ~$50 trillion market in the US alone, which impacts more of her constituents and is just as volatile.
New York’s hostile stance on the crypto industry has caused several exchanges, platforms, products, and companies to either abandon it for favorable states or lock New Yorkers out of their venues. Legislators, regulators, and government officials claim they are “protecting” consumers.
Ultimately, people are being pushed out of the innovation happening in the crypto space by their own representatives. Hester Peirce, Commissioner at the U.S. Securities and Exchange Commission (SEC) has expressed her frustration with the way regulations and laws are affecting financial innovation across the country.
Peirce is a big believer in an approach that would enable the nascent industry to flourish while regulators work together to figure out the best way to protect investors and modernize existing rules. In an article published on The Hill, the Commissioner wrote:
Cooperation among regulators is essential to strong, effective, pragmatic crypto regulation.