Bitcoin Magazine
Democrats Propose More Unsuitable Bitcoin and Cryptocurrency Regulations
On Friday, Maryland Delegate Adrian Boafo (D) and New York Assemblyman Clyde Vanel (D) submitted a joint letter to Democratic leaders in Congress, urging the passage of comprehensive federal cryptocurrency legislation.
In this correspondence, the authors highlighted New York State as a pioneer in cryptocurrency regulation, suggesting that the state’s BitLicense serve as a blueprint for federal crypto regulations. They also mentioned that New York has imposed a two-year moratorium on fossil fuel-based proof-of-work cryptocurrency mining, implying that the federal government might consider a similar approach.
Upon reviewing the contents of the letter, I recognized that Democrats are capable of proposing Bitcoin and cryptocurrency policies that are even less intelligent than the ones suggested by former Vice President Harris back in October 2024, particularly her notion of a “regulatory framework for cryptocurrency and other digital assets [that protects] Black men who invest in and own these assets.”
(It is essential to clarify that I support a regulatory framework that safeguards the rights of Black men to invest in cryptocurrency assets. I also advocate for similar protections for men of all races, including Asian, Hispanic, White, and Indigenous individuals. Furthermore, I believe that any Bitcoin and crypto policies we implement in the U.S. should equally protect the rights of women and transgender individuals of every race.)
Now, let’s delve into why creating federal regulations akin to New York’s BitLicense and establishing a mining moratorium for Bitcoin operations that utilize any fossil fuel would be a detrimental move.
For context, I’d like to express my intense feelings about this topic, as I am a resident of New York State, and I have witnessed firsthand the harm inflicted on the Bitcoin and cryptocurrency sector by local politicians and bureaucrats.
Understanding the BitLicense
New York State mandates that any virtual currency businesses operating within its boundaries must obtain a BitLicense.
On the surface, the process of securing a business license appears innocuous. However, once you recognize that it can take months or even years to complete the necessary paperwork and navigate various requirements, and that it can cost upwards of $100,000 to go through this process, it quickly becomes clear why numerous established businesses, let alone emerging startups, hesitate to even initiate the application.
As a result of the BitLicense, residents of New York are unable to access reputable platforms such as Strike, River, Swan, and Kraken. Additionally, they cannot utilize Lightning on CashApp or the fiat-to-bitcoin exchange on Fold, amongst other Bitcoin and crypto services hampered by bureaucratic barriers.
Perhaps even more frustrating is the fact that when New York residents attempt to access some of these platforms, they are met with messages like, “This exchange does not serve residents of jurisdictions including New York State, Iran, Syria, and North Korea.”
IT IS ABSOLUTELY ASTOUNDING WHAT NEW YORK’S POLITICIANS AND BUREAUCRATS HAVE DONE TO RESTRICT ACCESS FOR THE STATE’S OWN RESIDENTS.
If we were to extend the BitLicense concept to the federal level, we would significantly impede innovation and entrepreneurship. Not only would we stifle the Bitcoin and crypto companies with the resources to pursue a federal BitLicense, but we would also create barriers that force startups either to shut down or withhold their services from American citizens.
Implementing a federal BitLicense would seriously obstruct President Trump’s ambitions of establishing the United States as the leading Bitcoin superpower and the global cryptocurrency hub (perhaps that’s why these Democrats proposed it?).
Concerns Regarding the Mining Moratorium
While I acknowledge that the burning of fossil fuels harms the environment and that I believe in human-driven climate change, I also advocate for the importance of gainful employment and the flourishing of industries.
In upstate New York, the landscape has dramatically shifted since factories began closing after World War II, leading to a significant loss of jobs.
Gainful employment in upstate New York has largely been replaced by low-paying service-sector positions that barely support workers.
The urban decay evident in many upstate cities is so distressing that it’s hard to ignore.
One way to rejuvenate the economy in upstate New York would be to welcome the Bitcoin mining industry. While it’s true that Bitcoin mining companies might initially use fossil fuels, as Bitcoin mining encourages renewable energy initiatives, they could eventually transition away from fossil fuel dependency.
Moreover, if Assemblyman Vanel and Governor Kathy Hochul (D) are genuinely concerned about fossil fuel consumption, then 1) why haven’t they implemented a moratorium on all companies utilizing fossil fuels in New York, and 2) why have they not enacted laws preventing all New York residents from using internal combustion engine vehicles?
I pose these questions with a rhetorical intent, as I’m aware that I would never receive justifications from them on this matter, since the mining moratorium seems more like a token gesture—virtue signaling, if you will—rather than a concerted effort.
If their aim was genuinely to address the environmental devastation caused by fossil fuel combustion in New York, they would take far more substantial actions than merely banning Bitcoin mining firms that utilize such fuels (at the risk of jeopardizing New York’s economy).
Should we adopt a similar mining moratorium at the federal level, we would not only displace numerous Americans from their jobs but also cede a substantial portion of the hashrate to adversarial foreign nations already mining bitcoin using fossil fuels.
A Message to Democrats
Please cease proposing regulations that could harm an industry capable of offering numerous Americans high-quality employment opportunities.
Stop lending an ear to individuals like Delegate Boafo, Assemblyman Vanel, or any of the conservative-minded Democrats the letter targets, including Rep. Maxine Waters (D-CA) and Senator Elizabeth Warren (D-MA).
Instead, start taking guidance from progressive Democrats such as Congressman Ro Khanna (D-CA), Congressman Ritchie Torres (D-NY), and former Congressman Wiley Nickel (D-NC), who genuinely want to see Bitcoin and the surrounding industry thrive within the United States.
This post Democrats Propose More Unsuitable Bitcoin and Cryptocurrency Regulations first appeared on Bitcoin Magazine and is authored by Frank Corva.
