Legal ways to purchase crypto in New York State
I have been searching, maybe poorly, for more information about people in New York State investing in crypto and some legalities. I feel like a lot of forums have some guessing going on, a lack of research, or a lack of caring. Many people believe the rules of the U.S.A apply to the people of New York without realizing that New York has a BitLicense. There is a lot of information that I will most likely post on regarding the Bitlicense, but for now you can google it yourself and just accept it as a regulatory framework for virtual currency in New York State (NYS). This has pushed exchanges away from operating in NYS, and I think a lot of individuals in NYS.
You can research for yourself, but here is what I consider to be an educated list of legal exchanges in NYS:
LEGAL
1.) Coinbase- Has an approved BitLicense
2.) bitFlyer U.S.A- Has an approved BitLicense
3.) Gemini- Approved trust company
4.) itBit- Approved trust company
POSSIBLY LEGAL
1.) Bittrex- The NYS Department of Financial Services does not list Bittrex as having obtained a Bitlicense or obtained approval as a trust company, but Bittrex seems to think they are ok. They state that they were one of the first exchanges to apply for a Bitlicense, but they don't say they actually have one. Also see this twitter post below...
I really don't know what grandfathered in refers to here and I chuckled the first time I saw it. I was actually going to sign up for Bittrex anyway given this information, but they appear to still be not excepting new users. I like the layout of their website and the altcoins they list, so I was pretty bummed.
NOT LEGAL
1.) Sites like Shapeshift- If you try to go to Shapeshift it flat out wants nothing to do with you, at least in NYS.
SORT OF NOT LEGAL
1.) Here's where it gets confusing. I saw a couple of articles from CoinDesk who do a pretty good job here, but not much else. Everyone else seems to kind of be "don't ask." If you try other exchanges like Binance or Hitbtc, they don't seem to care about NYS financial law. You won't be blocked, but I personally wouldn't deposit USD directly into these exchanges. I haven't tried, but I am sure there must be New Yorker's out there who have. The safer way to go is to use one of the legal platforms to deposit USD, send ethereum to another exchange, and when you want to cash out send it back to a legal platform and pay your taxes. In my mind, NYS see's you working with an approved exchange and paying taxes so I don't see why they would give you a hard time. The Bitlicense reads more as a law for businesses, not the average person who just wants to invest in crypto.
Let me know what you think. If you question anything I have said here, I should be able to find a source to support it. Again, I am newbie crypto investor from New York who has done some research online.
-Chet