On Friday, Maryland Delegate Adrian Boafo (D) and New York Assemblyman Clyde Vanel (D) jointly addressed Democratic Congressional leaders, urging them to enact comprehensive crypto legislation at the federal level.
In their letter, the elected officials highlighted New York State’s leadership in crypto regulation and suggested that New York’s BitLicense should serve as a model for federal crypto regulatory frameworks. They also mentioned the state’s two-year moratorium on proof-of-work cryptocurrency mining using fossil fuels, hinting that this could be a direction for federal policy as well.
Reading these points made me realize that Democrats can propose Bitcoin and crypto policy ideas even less sensible than what former Vice President Harris suggested 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.”
(I want to clarify that I support a regulatory framework that safeguards the rights of Black men to invest in crypto. I also advocate for the same protections for Asian men, Hispanic men, White men, Indigenous men, as well as women and transgender individuals of all races.)
With that said, I’ll explain why establishing something akin to New York’s BitLicense at the federal level, along with imposing a mining moratorium on Bitcoin miners using fossil fuels, would be detrimental.
Forgive my emotional tone at times; this subject hits close to home as a New York State resident who has seen firsthand the harm caused by politicians and bureaucrats to the Bitcoin and crypto sector in the state.
The BitLicense
New York State mandates that all virtual currency businesses operating in the state obtain a BitLicense.
At first glance, acquiring a business license may appear benign. However, the reality is that it can take months, if not years, to complete the necessary paperwork, not to mention the process can cost well over $100,000. This substantial burden discourages many established firms—and especially early-stage startups—from even beginning the process.
Due to the BitLicense, residents of New York cannot access reputable platforms such as Strike, River, Swan, and Kraken. They also cannot utilize Lightning on CashApp or the fiat-to-bitcoin exchange on Fold, among other Bitcoin and crypto services hindered by this bureaucratic red tape.
To make matters worse, if you attempt to access these platforms as a New York State resident, you might see notifications like “This exchange doesn’t serve residents of jurisdictions including New York State, Iran, Syria, and North Korea.”
IT IS INCREDIBLY DISAPPOINTING HOW NEW YORK POLITICIANS AND BUREAUCRATS HAVE ENTRAPPED NEW YORK RESIDENTS.
Should we attempt to implement a BitLicense at the federal level, it would severely restrict innovation and entrepreneurship. Not only would it stifle existing Bitcoin and crypto companies that can afford the federal BitLicense process, but it would also create barriers for startups that cannot meet these costs, potentially leading them to shut down or refuse service to U.S. citizens.
A federal BitLicense would significantly obstruct President Trump’s ambition to establish the United States as the Bitcoin superpower and the crypto capital of the world. (Perhaps that’s why these Democrats made such a proposal?)
The Mining Moratorium
While I acknowledge that burning fossil fuels harms the environment and believe in the reality of human-induced climate change, I also support the need for gainful employment and the flourishing of industries.
In upstate New York, the decline in job opportunities has been stark since factories began closing after World War II.
In many areas of upstate New York, gainful employment in factories has been replaced with low-paying service-sector jobs that barely allow workers to make ends meet.
The urban decay in most cities in upstate New York is painfully evident.
To revive upstate New York, we should welcome the Bitcoin mining industry. While it’s true that some Bitcoin mining operations might initially rely on fossil fuels, the nature of Bitcoin mining encourages renewable energy development, which could lead to a transition away from fossil fuels over time.
Additionally, if Assemblyman Vanel and New York’s governor, Kathy Hochul (D), truly opposed fossil fuel use, then 1) why haven’t they imposed a moratorium on all companies utilizing fossil fuels in the state? And 2) why haven’t they enforced legislation to prevent New York residents from using vehicles with internal combustion engines?
These questions are rhetorical since I realize I wouldn’t get satisfactory answers from them. The mining moratorium seems to be more about virtue signaling than genuine environmental concern.
If they truly wanted to curb the environmental destructiveness linked to fossil fuel use in New York, they would take more significant actions than simply banning fossil fuel-powered Bitcoin mining companies (which would also devastate New York’s economy).
Implementing such a mining moratorium at the federal level would not only eliminate numerous American jobs but also hand over significant hashrate earnings to foreign adversaries who continue to mine Bitcoin using fossil fuels.
My Plea To Democrats
Please refrain from suggesting regulations that would damage an industry capable of providing high-quality jobs for many Americans.
Cease taking advice from figures like Delegate Boafo, Assemblyman Vanel, or other regressive-thinking Democrats such as Rep. Maxine Waters (D-CA) and Senator Elizabeth Warren (D-MA).
Instead, draw inspiration from more progressive Democrats like Congressman Ro Khanna (D-CA), Congressman Ritchie Torres (D-NY), and former Congressman Wiley Nickel (D-NC), who wish to see Bitcoin and its surrounding industry thrive in the United States.
