The New York City Bar Association has proposed a new amendment related to emerging technologies, such as digital assets, to encourage crypto firms to set up headquarters in New York and preserve the city’s preeminence as a leading commercial jurisdiction.
The New York Emerging Technologies Amendments seek to promote technological and commercial advances that decrease transaction costs and enhance the efficiency and security of financial transactions governed by the New York Uniform Commercial Code (UCC), according to the association’s New York State Legislative Agenda published on Jan. 29.
The association states that these advantages are significant factors considered by market participants choosing New York as a business location or as the jurisdiction in which to resolve legal disputes.
The amendments propose to adapt New York’s UCC to “recent and potential future developments in technology.” The UCC hasn’t been updated since 2014, and the report notes that there have been many important technological advancements since then.
The report highlights that New York risks losing digital asset market participants, as 11 states have already enacted the model UCC amendments proposed by the Uniform Law Commission (ULC), while another 15 states (and the District of Columbia) have introduced bills based on the amendments, with more states expected to follow suit. The report states:
“New York risks that market participants will prefer one of those states for transactions involving digital assets or even the law of other countries, such as England, which are rapidly reforming their commercial laws to accommodate emerging technologies and electronic transactions.”
New York has the world’s largest number of crypto companies, which stood at 843 firms at the end of 2023. New York was ranked as the third-best crypto hub in Recap’s annual list of top crypto hub cities published in 2023, with over 1,400 employees in crypto-related positions.
However, the NYC Bar Association also highlights the importance of accepting the new amendments to prevent crypto firms from migrating to jurisdictions with more crypto-friendly regulations:
“The amendments will also help ensure New York’s leadership in commercial and financial progress and growth and will disincentivize migration of digital commerce to other jurisdictions which more clearly promote and encourage technological and commercial advances.”
New York has been named the worst state for crypto taxes, while Florida has been named the “best state,” according to a Jan. 22 study by CoinLedger.
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