New York is trying to become the U.S.’s “crypto capital.” Major cryptocurrency companies are hiring an army of lobbyists to influence that outcome.
New filings show that Digital Currency Group, Blockchain.com, and roughly a dozen other firms are spending upwards of $100,000 a month in a $1.5 million Albany lobbying blitz aimed at helping to write the rules governing the $2 billion crypto industry, which remains mostly unregulated at the federal level.
Even firms like eToro, which don’t yet operate in New York, are staffing up in Albany because laws written there could impact legislation across the U.S.
New York is home to some of the toughest financial watchdogs in the world and crypto companies are conscious of the lessons learned by technology companies like Airbnb Inc. and Uber Technologies Inc., which have tussled with New York regulators over the years. They’re also mindful of New York’s already onerous crypto licensing requirements and fear that states with fewer regulations, such as Texas, could lure companies there instead.
On New York’s cutthroat political stage, “we have to have a seat at the table,” said Lane Kasselman, chief business officer at crypto trading platform Blockchain.com.
That’s especially important as New York and other states ramp up efforts to write new rules around crypto, Kasselman said, noting that among the crypto legislation that Blockchain.com is tracking, 96 bills were introduced in the U.S. in the first six weeks of 2022. "In 2021, there were 13 bills introduced in the U.S. related to crypto,” Kasselman said.
New York lawmakers are publicly embracing crypto technology as a way to boost an economy still reeling from the pandemic and Wall Street’s shrinking footprint. “Does New York want to be the center of the next great financial system or give it up to Miami or San Francisco?” Kasselman said. “What’s at stake? The best and brightest are leaving.”
In the Lead ... for Now
New York City Mayor Eric Adams, who declared before he took office in January 2022 that he’d take his first three paychecks in cryptocurrency, has staked a claim at making the city “the center of the cryptocurrency industry.” Adams has since partied with crypto billionaire and Galaxy Investments CEO Mike Novogratz and hitched a ride to Puerto Rico on the jet of crypto entrepreneur Brock Pierce. He’s appeared at industry devotees’ meet-ups and explained the intricacies of Ethereum and Bitcoin.
The enthusiasm has been contagious. “There’s so much investment, activity and scrutiny in the industry recently that a lot of firms are realizing it’s time to get off the sidelines,” said Eric Soufer, who launched a new fintech and crypto lobbying practice in January for Tusk Strategies.
Tusk Strategies is owned by Bradley Tusk, a longtime political strategist who ran campaigns for former New York mayoral candidate Andrew Yang and former Mayor Michael Bloomberg, the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News.