What does Zohran Mamdani's election as mayor of New York City mean for cryptocurrencies?

Author: Aaron Wood, Source: Cointelegraph, Translated by: Shaw Jinse Finance

After a long campaign, Democratic candidate Zohran Mamdani won the New York City mayoral election. For the past year, the New York City cryptocurrency industry has been closely watching how Mamdani's election would affect the blockchain space.

The Associated Press announced on Wednesday that Mamdani had won the election. He defeated former Governor Andrew Cuomo, who ran as an independent candidate, and Republican candidate Curtis Silwa. Mamdani's campaign focused on the cost of living in New York City, such as rent and childcare services, and proposed taxing the top 1% of earners in the city to fund these projects.

Some in the cryptocurrency industry, such as Tyler Winklevoss, co-founder of cryptocurrency exchange Gemini, were disappointed by Mamdani's high support in the polls.

Critics claim his policies will have disastrous consequences for the city's businesses. While Mamdani rarely comments publicly on cryptocurrencies, the industry is now closely watching how the mayor-elect's policies will impact digital assets. Mamdani's stance on cryptocurrencies remains unclear. While other mayoral candidates, notably Andrew Cuomo and former mayor Eric Adams, have publicly expressed support for the cryptocurrency industry, Mamdani has not. In his few instances of mentioning cryptocurrencies, his comments have almost entirely been unrelated to policy and have not indicated whether he will support New York City's cryptocurrency industry. In 2023, following the collapse of the Terra stablecoin system and the cryptocurrency exchange FTX, New York State Attorney General Letitia James introduced a consumer protection bill. In James's words, the bill would introduce "common-sense measures to protect investors and end the fraud and chaos that has become a hallmark of cryptocurrency." Mamdani, then a New York City Councilman, supported the bill, stating, "When cryptocurrency companies go bankrupt, it's not the wealthy who suffer, but small investors, most of whom come from low-income and color communities." Mamdani also mentioned cryptocurrency because it relates to his opponent, Andrew Cuomo. In April of this year, Mamdani pointed out that Cuomo had advised him on the SEC's investigation into the cryptocurrency exchange OKX. The investigation ultimately led OKX to admit to violating U.S. anti-money laundering laws and pay fines exceeding $500 million. While both paragraphs mention cryptocurrency, they focus more on other aspects of Mamdani's campaign, including consumer protection and affordability issues, and contrast him with a political opponent. However, this did not prevent him from incurring the wrath of prominent figures in the New York cryptocurrency industry or the broader blockchain space. In response to Mamdani's remarks about taxing billionaires, David Sacks, the White House's director for artificial intelligence and cryptocurrency affairs, wrote: "Silicon Valley, wake up. This is the future of the Democratic Party. You basically have only two choices now: either support 'Make America Great Again' or prepare to become Mamdani's prey." Tyler Winklevoss claimed that Mamdani's supporters are spoiled, highly educated college students. "They have never understood the values ​​of Western civilization, so they don't understand why they should defend it, nor how to defend it." Shaun Maguire, a partner at Sequoia Capital who led the firm's investment in the stablecoin platform Bridge, criticized that "the West will pay a heavy price for this." Concerns about Mamdani's election as mayor prompted financial giants to donate significant sums to Andrew Cuomo's campaign. Hedge fund manager Bill Ackman reportedly donated $1 million to two anti-Mamdani political action committees, "Defend NYC" and "Fix the City," and $250,000 respectively. Mamdani responded, "He's spent more money on me than I collect taxes from him." The "Innovate NY PAC," a lobbying committee representing the cryptocurrency and artificial intelligence industry, announced its support for Andrew Cuomo. This announcement came on October 28, just a week after Cuomo announced a digital asset development strategy aimed at garnering support from the cryptocurrency industry. "Innovate NY" had previously reportedly donated $30,000 to Cuomo's campaign. What can the mayor do? Despite strong opposition from financiers and cryptocurrency industry giants, the New York City mayor's actual influence on cryptocurrencies is limited. Securities and financial laws originated in Albany and Washington, and any changes the New York City mayor wishes to implement in this area must first be approved by the state and federal governments. The New York City mayor wields influence over matters such as municipal taxes, licensing, and building permits, all of which could potentially impact the cryptocurrency industry if the mayor decides to act. However, even so, the mayor's influence is limited. As cryptocurrency lawyer Aaron Brogan points out, "In reality, cryptocurrency companies are typically small-scale operations. They don't need huge real estate or dedicated equipment; they just need a room full of human capital and an idea. This makes them relatively less susceptible to local pressure in their development. Of course, energy-intensive applications like Bitcoin mining are another matter, but nobody does that in New York anyway." Brogan notes that the mayor's ability to exert control at the retail level is also limited due to New York State's stringent BitLicense requirements. “Many companies either completely avoid the state or operate under New York State’s BitLicense licensing system, which likely shields them from direct pressure from the city government.” Mamdani won’t be sworn in until January 1, 2026, and even then, he will need to work hard to influence the policies he campaigned on. How and whether these policies will affect the cryptocurrency industry remains to be seen.