Controversy Surrounds Indicted NYC Mayor’s Crypto Vision

NYC Mayor Eric Adams, prior to facing legal troubles, had ambitious plans to establish the city as a prominent center for cryptocurrency.

Three years prior to cryptocurrency becoming a key issue in the U.S. presidential race, New York City was in the midst of a mayoral election where the future stance on crypto was a focal topic. Eric Adams, a Democrat, competed against Republican Curtis Sliwa, both advocating for pro-crypto policies. Adams had secured victory over Andrew Yang, another cryptocurrency supporter, during the Democratic primary.

During his campaign, Adams pledged to transform NYC into a hub for Bitcoin. After winning the election in November 2021, he reiterated his commitment, claiming he would position the city at the forefront of the cryptocurrency sector and advocated for the teaching of crypto in educational institutions.

However, nearly three years after taking office, Adams faced indictment by the FBI on charges related to bribery and campaign finance, involving alleged misconduct over nearly a decade. This led to the resignation of seven high-ranking officials from his administration, while many others are under investigation.

The assessment of Adams’ impact on the crypto landscape in NYC varies widely. His administration defends its achievements, yet many within the community feel that substantial progress has not been made. Additionally, concerns are rising regarding the association of the cryptocurrency sector with figures embroiled in controversy.

Adams’ Approach to Cryptocurrency

Fresh from his election, Adams engaged in a competitive exchange with Miami’s pro-crypto Mayor Francis Suarez, who declared he would receive his salary entirely in Bitcoin. In response, Adams promised to accept his first three paychecks in cryptocurrency, a commitment that he later fulfilled with Coinbase’s assistance.

New York City officials are mandated to disclose financial interests annually, which includes information about securities ownership. In his 2023 financial disclosure, Adams reported holding between $5,000 and $54,999.99 in Bitcoin, indicating he has maintained his investment since his paychecks began.

After taking office, Adams continued to promote cryptocurrency. In June 2022, he publicly criticized a temporary ban on non-renewable energy proof-of-work mining operations that was passed by the New York State Senate, urging the governor to veto it. Six months later, during a bear market for crypto, he reaffirmed his commitment to cryptocurrency innovation.

In February 2023, the NYC Council’s Technology Committee conducted a hearing focusing on blockchain and cryptocurrency, featuring the city’s CTO, Matthew Fraser, who had been appointed by Adams. Fraser outlined various initiatives aimed at enhancing public understanding and use of digital currencies, including efforts to create an official digital wallet accepting cryptocurrencies for city employees and public benefit recipients. The progress and timeline of these initiatives remain unclear as of now.

A representative from the Office of Technology and Innovation stated their ongoing commitment to responsibly employing new technologies to enhance service delivery while keeping the public’s safety in mind. They emphasized the importance of thorough evaluations to ensure that these technologies benefit residents rather than simply pursue trends.

“We will continue to assess both the practical requirements and risks of blockchain applications in the public sector.”

The representative highlighted a recent appointment of a digital assets and blockchain policy adviser within their agency as a sign of ongoing efforts to establish a digital asset strategy for NYC.

Is New York City Truly a Bitcoin Hub?

Despite the administration’s claims of progress in cryptocurrency, some believe that Adams has not significantly influenced the crypto scene in NYC. The Office of Technology and Innovation underscored the city’s focus on “reasonable” implementations to ensure safety for residents.

“This means carefully evaluating these technologies so that we’re providing real benefits to New Yorkers — rather than merely chasing trends.” The definition of what constitutes “reasonable” may vary among individuals.

Thomas Pacchia, founder of NYC Bitcoin bar PubKey, noted a lack of noticeable changes since Adams took office. Despite the establishment hosting numerous political events about Bitcoin, he stated, “We never heard anything from his office, which I think speaks volumes.”

Regardless of Adams’ stance on crypto, New York remains subject to stringent state regulations, making true progress challenging. The state’s regulatory body has taken action against platforms like Gemini, KuCoin, and Tether. To operate within the state, companies must navigate the complex and costly BitLicense process, which many deem overly burdensome.

According to Pacchia, this licensing structure hinders Bitcoin businesses from establishing themselves in New York, comparing its unapproachability to being listed among heavily sanctioned areas.

“It’s unfortunate anytime you see a term of service or something like that to have New York state listed alongside North Korea and Iran.”

Julie Samuels, CEO of Tech:NYC, explained that while rigid licensing is intended to enhance consumer trust, it has also delayed growth in the sector and limited the economic potential of crypto businesses.

To foster a more crypto-friendly environment in NYC, Pacchia suggests abolishing the BitLicense. While he acknowledges that Adams may not possess the authority to do so unilaterally, being mayor provides a significant platform to advocate for sensible regulatory reforms.

The Future of Pro-Crypto Policies Under Legal Scrutiny

Given the legal challenges facing Mayor Adams, his future remains uncertain. He has resisted calls to resign and expressed determination to contest the charges. Recently, Adams reiterated his intention to remain in office through the 2025 election, despite the potential for severe legal consequences.

In a scenario where he is removed by the state’s governor or opts to step down, the city’s public advocate would succeed him, leading to a special election for a new mayor. The incoming public advocate would not have the power to dismiss Adams’ appointees, leading to unclear continuity in the city’s blockchain initiatives.

Regardless of who takes the role in the future, Adams faces a significant uphill battle for re-election, which could impact the continuation of his policies.

Political Risks in the Crypto Landscape

Adams is not alone among high-profile pro-crypto politicians facing legal troubles, as demonstrated by former President Trump, who is currently dealing with multiple legal cases.

Concerns are rising about the implications of such associations for the cryptocurrency industry, with vocal members of the crypto community suggesting a broader view should be taken when supporting candidates, rather than solely focusing on their pro-crypto stance.

Notably, discussions among prominent figures such as Ethereum co-founder Vitalik Buterin have highlighted the importance of voting based on comprehensive political views, while whistleblower Edward Snowden advises caution against overly zealot support for any candidate.

The situation with Mayor Adams serves as a reminder that while electing pro-crypto officials can lead to some positive developments, it does not guarantee the fulfillment of promises. Moreover, such individuals may carry their past controversies into leadership roles, which can alienate portions of the electorate.

Despite political challenges, blockchains like Bitcoin will continue to function independently of the whims of any single official. Thus, regardless of elected officials’ popularity or policies, cryptocurrency is poised to evolve continuously.