Crypto Firms Try to Influence New York Rules by Hiring Lobbyists

Cryptocurrency platforms want a seat at the table as legislators discuss new rules related to the crypto industry.
New York legislators are preparing to analyze and approve the bills that have been presented on this matter.
They are aware of the importance of the industry in economic recovery and the looming inter-state competition to corner cryptocurrency firms.

Several crypto companies are spending up to $100,000 a month on the $1.5 million Albany lobby, which seeks to influence the drafting of the rules that will govern the crypto industry for years to come, notes a Bloomberg report this week.

Most of the crypto sector, which represents a market of more than 2 billion dollars, remains unregulated at the federal level in the United States. New York wants to be the “crypto capital” of the country, and cryptocurrency platforms need to water down legislation with the help of lobbyists.

There are a dozen or so of these companies, including Digital Currency Group and Blockchain.com, that are making this strategic investment to influence the final decision made by lawmakers in the United States Congress and the New York Legislature.

There are cryptocurrency platforms like eToro, which despite not operating in the state of New York, are already hiring the services of expert lobbyists in the state capital, Albany. Crypto firms know that the laws approved in NY will end up affecting US legislation on this matter.

On the Flipside

The Big Apple is home to several of the strictest and most powerful regulatory bodies in the world.
Cryptocurrency firms know that taking on New York regulators is not exactly a good idea. They have learned the lessons of other companies like Uber Technologies Inc. and Airbnb Inc. that did it before.

Likewise, crypto companies and legislators are aware that obtaining an operating license in New York is expensive and that other states of the union with fewer regulations, such as Texas, could monopolize the business.

At a time when legislators in New York are analyzing the drafting and application of new rules, it is very important for cryptocurrency firms to take the initiative to have a seat at the table when these laws are discussed, according to the commercial director of Blockchain.com, Lane Kasselman.

Some 96 bills have already been introduced across the country this year, while another 13 bills related to cryptocurrency regulation were introduced in 2021, Kasselman reported. Blockchain.com has been doing a detailed tracking of the proposed legislation presented so far.

Many New York lawmakers are recognizing the value of the crypto industry in funding the spending budgets and growth of the faltering US economy, which continues to be hit by the covid-19 pandemic and faces the challenges of reducing its carbon footprint.

Will NYC be the ‘Crypto Capital’ of the United States?

“Does New York want to be the center of the next great financial system or give it up to Miami or San Francisco? the executive wondered. "What is at stake? The best and the brightest leave."

Crypto businesses in New York have the support of the city’s newly elected mayor, Eric Adams, who has vowed to make the US financial capital “the hub of the cryptocurrency industry.”

Former counsel to the NYC Attorney General and adviser to Tusk Strategies, Eric Soufer, said the enthusiasm for lobbying 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,” the crypto and fintech lobbyist commented.

Tusk Strategies, owned by well-known political strategist Bradley Tusk, has run the election campaigns of several city mayoral candidates and represented Uber when it launched the car-sharing service in New York in 2011.

For Soufer it is clear that:

“If you want to have a role in shaping the trajectory of crypto regulation — not just on the state level, but also on the federal level — you need to engage and demystify the space.”