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Why Eric Adams Failed to Make NYC a Crypto Hub

Bitcoin

Mayor Eric Adams

New York

Eric Adams made huge promises to make New York City attractive for crypto businesses — but lacked the power to turn this into reality.

Last updated:

September 30, 2024 at 04:18 EDT

Features writer

Connor Sephton

Fact Checked by

Elena Bozhkova

Why Trust Cryptonews

NYC Bitcoin

New York City Mayor Eric Adams is best known in crypto circles for being unabashedly pro-Bitcoin — even engaging in friendly rivalry with Miami counterpart Francis Suarez.

Back in 2021, he vowed on X that he planned to take his first three paychecks as mayor in BTC and ETH, and make NYC the beating heart of the crypto sector.

Unfortunately though, his rhetoric hasn’t always matched up to reality.

He was unsuccessful in attempts to block New York State proposals to impose a two-year moratorium on Bitcoin mined using fossil fuels. While you could argue this policy is good from an environmental standpoint, Adams had raised fears that this would “put barriers in place” that prevent NY from becoming an attractive destination for crypto businesses.

Adams’ Democratic counterpart Kathy Hochul declined to veto the measures and they came into force in November 2022 — affecting all Proof-of-Work cryptocurrencies.

Meanwhile, the mayor was left red-faced after it emerged that he had failed to declare his BTC holdings last year. Even though Adams had vowed that he would not sell his digital assets during the recent bear market, he told regulators he didn’t own more than $1,000 in crypto. It remains unclear how much is in his wallet — or whether he’s still converting his paychecks.

And in another embarrassing development, it emerged that he had met with Sam Bankman-Fried at a swanky dinner in 2022, just a few months before FTX collapsed. The doomed exchange’s general counsel, Ryne Miller, ominously tweeted that NYC was “in good hands” under his leadership.

But all this is small potatoes compared with the legal headaches that Adams is currently facing. Why? Because he’s become the first sitting NYC mayor to be charged with federal crimes.

What’s Going On?

Adams is facing five counts — including bribery, fraud, and conspiring to receive campaign contributions by foreign nationals, already a delicate topic in the U.S.

It’s alleged that he received more than $100,000 worth of luxury meals, high-end hotel stays, and airline upgrades from Turkish nationals — paying less than 10% of what it would usually cost for two nights at a five-star hotel in Istanbul.

Prosecutors now claim Adams was asked for political favors in exchange — with The New York Times writing that “a love of luxury may bring him down.”

Adams is denying the charges and is vowing to prove his innocence, claiming he is being targeted by rivals because of his politics.

And although he is refusing to resign, the stakes are high right now, as he could face jail time if convicted.

Reports from Politico even suggest that Governor Hochul is considering whether to use rare powers that would oust Adams from power.

Whatever happens, it’s now starting to look increasingly unlikely that the mayor will succeed in his quest for a second term when New Yorkers head back to the polls in June 2025. And by the looks of things, none of the other Democratic candidates are as pro-crypto as he is.

The Impact on Crypto

Zooming out, and there isn’t any sign that all of this legal drama will have much impact on Bitcoin, which has pierced through key resistance at $65,000 — potentially opening the door for a return to all-time highs above $73,000.

Beyond his crypto paycheck stunt, Adams hasn’t really spoken about crypto all that much during his time in office — or introduced policies that make the city more attractive for the industry.

That’s partly because a lot of the decision making in this arena is taken by the state, rather than the city. High tax rates make New York hugely uncompetitive when compared with other states — and crypto firms operating here also need to obtain a BitLicense, which means jumping through a plethora of regulatory hoops.

Even if businesses bite the bullet and do set up shop in NYC, it can be fairly unattractive for top talent confronted with surging levels of rent.

This helps explain why other U.S. states have proven far more enticing for startups, investors, and professionals alike — including Wyoming, Texas and California.

Austin in particular has become a hotspot for Bitcoin mining — driven by cheaper energy and a lax regulatory landscape unencumbered by the moratoriums imposed over in New York.

Adams has failed in his dream of making NYC the center of the cryptocurrency industry. And now, he’s fighting for his political life.