Crypto Industry Bracing for Potential Mamdani Impact

Zohran Mamdani's victory in the New York mayoral primary election on June 24 has sparked significant concern within the crypto industry. Mamdani is set to face off against incumbent Mayor Eric Adams in the November general election, and many in the crypto sector are apprehensive about the potential impact of a Mamdani win. Executives and pro-crypto government officials have criticized Mamdani's policy proposals, comparing his left-leaning stance to Soviet collectivism.

Mamdani has outlined several policy positions that are more progressive than typical Democratic Party norms, but he has been relatively quiet on the subject of cryptocurrency. In contrast, Adams has been actively promoting crypto, which has further heightened the industry's unease.

In the days following the election, prominent figures in the crypto industry, such as Gemini crypto exchange co-founder Tyler Winklevoss and US AI and crypto czar David Sacks, offered harsh critiques of Mamdani. Winklevoss described New York City as a "broken kleptocracy" under Democratic rule and suggested that things would have to get worse before they improve. Sacks called on Silicon Valley to "wake up" to the supposed rising tide of communism in New York.

During his campaign, Mamdani focused on a range of policies that raised eyebrows among moderate Democrats and conservative opponents. However, he has provided little detail on how he plans to regulate the city's crypto industry. His few public statements on the matter have been relatively mild. In 2023, he agreed with New York Attorney General Letitia James' call for more consumer protections within the stablecoin industry following the collapse of the Terra stablecoin ecosystem and the broader crypto crash.

Mamdani's concerns over consumer protection align with the views of US financial regulators and lawmakers, who have been advocating for stronger consumer protections as new crypto legislation makes its way through Congress.

As mayor, Mamdani would have considerable influence over municipal issues such as taxes, licensing, and building permits. However, his ability to significantly impact the crypto industry appears limited. The current mayor, Adams, promised to make New York City a crypto hub but has seen little progress in this regard. Adams' administration has made pro-crypto statements and announced blockchain education efforts, but the city's financial industry is primarily regulated by state authorities like the New York Department of Financial Services and the attorney general.

Despite the tough stance of the attorney general and the complexities of obtaining a BitLicense, crypto companies continue to move to New York. Another strategy for the crypto industry could be to support Mamdani, as suggested by crypto lawyer Aaron Brogan. Compromise on certain issues and campaign contributions could sway Mamdani to a neutral or even pro-crypto stance.

The chances of Mamdani winning the election look favorable, according to American businessman and political strategist Bradley Tusk. Tusk noted that the general election is not expected to be competitive, and Adams' favorability ratings are low. However, Mamdani faces significant challenges, including potential opposition from the crypto lobby and threats from the Trump administration.

Mamdani's platform includes a policy of not cooperating with Immigration and Customs Enforcement officials, which has drawn criticism from President Donald Trump and Representative Andy Ogles. Trump falsely claimed that Mamdani, who moved to the US at seven and was naturalized in 2018, was in the country illegally. Ogles called for Mamdani to be denaturalized and removed from the country.

While the crypto industry may be concerned about Mamdani's potential impact, it appears that his ability to challenge the industry is limited by the regulatory framework in place. The industry's best course of action may be to engage with Mamdani and seek common ground, rather than opposing him outright.