On Friday, Maryland Delegate Adrian Boafo (D) and New York Assemblyman Clyde Vanel (D) sent a joint letter to Democratic Congressional leaders urging them to pass comprehensive crypto legislation at the federal level.
In the letter, the elected officials cited New York State as being a leader in crypto regulation and proposed that New York’s BitLicense be used as a model for what federal crypto regulation should look like. The letter’s authors also noted that New York State has placed a two-year moratorium on proof-of-work cryptocurrency mining that uses fossil fuels (seemingly citing this as something else the federal government might consider doing).
It was upon reading these points in the letter that I realized that Democrats are capable of putting forward Bitcoin and crypto policy ideas stupider than what former Vice President Harris proposed in October 2024, which was “a regulatory framework for cryptocurrency and other digital assets [that protects] Black men who invest in and own these assets.”
(Please note that I’m in favor of a regulatory framework that protects the right of Black men to invest in crypto assets. I’m also in favor of one that protects the right of Asian men, Hispanic men, White men, and Indigenous men to do the same. Oh, and I’d like for whatever Bitcoin and crypto policy we craft here in the U.S. to protect the right of women and transgender people of all races to invest in bitcoin and crypto, as well.)
With that said, let me break down why the U.S. federal government’s creating something comparable to New York’s BitLicense and putting a mining moratorium on Bitcoin miners that use any amount of fossil fuels would be a bad idea.
And please forgive me in advance for being emotional at points. This issue is personal to me, as I’m a resident of New York State and have experienced firsthand the damage that politicians and bureaucrats have done to the Bitcoin and crypto industry in the state.
The BitLicense
New York State requires that all virtual currency businesses that operate in the state obtain a BitLicense.
At face value, obtaining a license to operate a business seems harmless enough. But once you learn that it takes months to years to complete all of the paperwork and to jump through all of the hoops required to obtain one and that it costs upward of $100,000 to go through this process, you quickly see why so many established companies in the space — never mind the early-stage start-ups — don’t even start the process.
Because of the BitLicense, New York State residents cannot use reputable platforms like Strike, River, Swan, and Kraken. Nor can they use Lightning on CashApp or the fiat-to-bitcoin exchange on Fold. This is only to name a few of the Bitcoin/crypto products and services that we can’t use because of red tape.
But what’s perhaps more of a slap in the face is that when you attempt to use some of these platforms as a New York State resident, you’re presented with messages such as “This exchange doesn’t serve residents of jurisdictions including New York State, Iran, Syria and North Korea.”
TRULY FUCKING STAGGERING THE COMPANY THAT NEW YORK POLITICIANS AND BUREAUCRATS HAVE PUT NEW YORK RESIDENTS IN.
If we were to apply the BitLicense on a federal level, we would deeply stifle innovation and entrepreneurship, as not only would we greatly hinder the Bitcoin and crypto companies that have the money and resources to go through the process of obtaining a federal BitLicense, but we’d create a moat around them while creating a scenario in which the start-ups that can’t afford to go through the process either close up shop or simply not serve U.S. citizens.
A federal BitLicense would be a major hindrance to President Trump’s accomplishing his goal of making the United States the Bitcoin superpower and the crypto capital of the world. (Maybe that’s why these Democrats proposed it?)
The Mining Moratorium
While I know that burning fossil fuels is detrimental to the environment and I believe that human-made climate change is a real thing, I’m also a proponent of people being gainfully employed and industries being able to flourish.
And in upstate New York, there’s been a notable lack of both since factories began closing down in the region after World War II.
What’s replaced gainful employment in factories in many parts of upstate New York are service-sector jobs that barely enable workers to make ends meet.
The urban blight in most cities in upstate New York is so palpable that it’s nauseating.
What we could do to revive upstate New York is invite the Bitcoin mining industry in. Sure, Bitcoin mining companies might burn some fossil fuels to power their operations at first, but as Bitcoin mining incentivizes renewable energy production, they could move away from fossil fuels as their source of energy.
Also, if the likes of Assemblyman Vanel and New York State’s governor, Kathy Hochul (D), are so against companies that burn fossil fuels then 1) Why haven’t they put a moratorium on all companies in the state that use fossil fuels? and 2) Why haven’t they enacted laws that do things like stopping all New York residents from using cars that have internal combustion engines?
I ask these questions rhetorically, as I know I’d never get answers from either of them on this, because the mining moratorium is more for show — virtue signaling, if you will — than anything.
If they really wanted to make a concerted effort to stop the environmental damage that burning fossil fuels causes in New York, they’d do much more than prohibit Bitcoin mining companies that use fossil fuels from operating in the state (and they’d take down the economy of New York in the process).
If we were to apply such a mining moratorium on a federal level, we’d not only put many Americans out of work, but we’d also cede much of the hashrate to hostile foreign powers who are using fossil fuels to mine bitcoin anyway.
My Plea To Democrats
Please stop proposing regulation that will hurt an industry that could otherwise provide many Americans with high-quality jobs.
Please stop listening to the likes of Delegate Boafo, Assemblyman Vanel, or any of the backward-thinking Democrats to which this letter was addressed, including Rep. Maxine Waters (D-CA) and Senator Elizabeth Warren (D-MA).
Instead, start taking queues from more forward-thinking Democrats like Congressman Ro Khanna (D-CA), Congressman Ritchie Torres (D-NY), and former Congressman Wiley Nickel (D-NC), politicians who would like to see Bitcoin and the industry that surrounds it succeed in the United States.
This post Democrats Propose More Bad Bitcoin And Crypto Regulation first appeared on Bitcoin Magazine and is written by Frank Corva.
