Where to Buy Bitcoin New York

New York is the most stringent state for buying and selling cryptocurrencies in the US. It imposes State licenses referred to as “BitLicense” that cryptocurrency exchanges must abide by. In addition legislation is being constantly proposed to actively pursue offshore exchanges to remove US customers or else face penalty, and is engaging with the broader financial services sector to prevent facilitating transactions to offshore exchanges.

Key Points:

All exchanges that intend to operate in New York must acquire a “BitLicense”.
Offshore cryptocurrency exchanges remain open to accepting New York customers.
Residents are New York are permitted to purchase and sell Bitcoin.
Bitcoin and other forms of digital currency are defined in the law and can be used as a form of payment.

New York investors, let alone day to day users, are encouraged to turn to onshore regulated and Bitlicensed cryptocurrency operators. Unfortunately, the laws are overwhelmingly burdensome, that many exchanges are leaving the state.

At the time of writing, New York residents are permitted to use offshore exchanges without risk. The onus lies with the exchange to meet compliance rules, hence if at fault, there are no repercussions to customers. But even this statement is an assumption since challenging of these laws have not ever been tested.

The challenging of operating an exchange with imposed laws is currently being challenged, by Theo Chino, and advocate of the New York Bitcoin community.

If you intend to trade and invest in Bitcoin and Cryptocurrencies in New York, then we highly recommend the cryptocurrency exchanges that we have researched and reviewed.

Top 5 New York Bitcoin Exchanges

Overview of New York Bitcoin Exchanges

New York has implemented one of the most stringent and compliance heavy regulations than any other US State. In some ways, this is at least better having no laws or laws that clearly prohibit any form of virtual currencies. Yet, these laws are far too demanding and remove any benefits that cryptocurrencies provide. In essence turning cryptocurrencies even more cumbersome to use than fiat currencies. It’s unclear why lawmakers have taken this heavy handed approach, but until the voices of reason by crypto advocates are heard, onshore New York State exchanges will be limited (or non existent).

You will find that there are many bitcoin and cryptocurrency ATM’s along with a few big exchanges that have made New York their base for a head office. Onshore exchanges can be deemed far more safer than offshore, however the benefits of offshore certainly allow for quicker account set up (less red tape) and greater privacy.

When considering a cryptocurrency exchange, there are many aspects to take into account. These may include safety and security, platform reliability, latency, fiat and cryptocurrency pairings, licensing, fees and a raft of many others.

At CoinMaximus, we outline the top criteria to consider when choosing an exchange.

🔒 Safety and Security

Safety and security is one of the criteria that is at the top of the list. If you are new to cryptocurrency, you may not be familiar that many exchanges have been hacked resulting in coins stolen. There have also been instances whereby customer details have been leaked, and hackers have used this information to spam or phish.

Choosing a reputable, safe and secure exchange is therefore vital for investors and traders. Safe and security is an extremely hard factor to judge. The larger the exchange, the higher the risk that it will be targeted by hackers. But then again, the more investment in cyber security by the exchange operator.

Licensing and regulation, to a degree, also plays an important part. If regulated in the US, you can be assure that it will need to abide by compliance laws to protect customers. That said, the laws in the US, dictated by the Securities Commission and IRS, can be overwhelming and could result in complete exposure of all cryptocurrency trades.

Hence, many are turning to offshore exchanges to facilitate the exchange of cryptocurrencies.

In finding a good safe and secure exchange looking for a two step authentication process. A two step authentication requires the customers to validate their log in twice through two devices. This normally involves the smartphone as well as the laptop, tablet or other operating device.

Also, research the exchange’s history of being hacked. At present, nearly ALL the global big player exchanges have been attacked, and some have lost customer monies and details. It is fair to say, that all exchanges are at risk, but the safest ones, are normally the largest and the most established. We strong recommend NOT day trading, but investing for the future. Purchase your bitcoin and move them offline onto a cold wallet immediately.

📞 Customer Support

Every one that uses a cryptocurrency exchange will at some time or another need to engage with customer support. Users of any platform (particularly one’s that offer a wide product range that includes margin lending, staking, ICO and other services) will need to ask for guidance in using, in technical, and will have questions.

Irrespective of whether you are a beginner or experienced, you will eventually need to ask a question, and therefore the customer support of the exchange is important. Prompt and accessible customer support is highly regarded when choosing an exchange. If you choose an exchange, that doesn’t answer you promptly, or even professionally with the appropriate answers, then you could lose a lot of money, simply through a change in exchange rates. Worse still, you may be advised to place the wrong buy order for bitcoin and end with a margin lending product instead of a straight buy!

Looking for bitcoin and cryptocurrency exchanges, that provide good quality customer support. You will need it.

💳 Payment Methods

This criteria is often overlooked. Common payment methods include credit card – Visa and MasterCard, wire transfers, and of course bitcoin deposit and withdrawals. e-wallets are now also making a big entrance to the scene, with PayPal now accepting bitcoin as a form of storage option.

The larger and better exchanges will offer a wider range of payment options, with the appropriate encryption in place to perform transactions safely and securely.

🪙 Cryptocurrency Selection

The bigger and larger cryptocurrency exchanges will offer a massive range of pairing. You could trade in potentially over the hundreds and thousands of cryptocurrency on offer. At the end of the day, you just need to find a good exchange that will offer the cryptocurrency and fiat currency that you want to exchange in. Unless you intend to buy and sell in an extremely wide and diverse range of cryptocurrency, then it doesn’t really matter how wide the cryptocurrency selection is, as long as it offers what you are looking for.

Be aware, that some exchanges are deal with crypto to crypto. If you are just starting out, and have no crypto, then of course, the crypto to crypto exchanges will not meed your needs.

🏷 Coupons and Discounts

If you have noticed already, the industry is turning to marketing sales pitches that promises easy money, quickfire returns and rewards that includes free shares, free coins, and discounted fees through the use of coupons.

It most cases, the exchanges that use high level marketing pitches (that are really too good to be true) should be avoided at all cost. Don’t fall for these tricks.

Once you have found an exchange that you do want to sign up to, then look for coupons and deals that will boost your return. There are many coupons out there. Just Google for them on the internet and you will find them.

Then sign up and use the coupon.

I know that you are thinking, but the scam sites also offer coupons. Yes, they do and this is the danger of not knowing which exchange is good or bad, hence we high recommend choosing from our list.

💰 Fees

Choosing the wrong exchange that has high fees, will destroy your investment strategy. Now, this doesn’t mean that you should go out there and pick the exchange with the lowest fee offering. Far from it, because the lowest could also be the most dangerous. It is a hard balancing act, and exchanges make it even harder to compare with each having their own fee structure.

To a degree, each investor should look at their intend volume and dollar value of trades and then apply the fee structure of the exchange, to determine which offers the most value for money. Undoubtedly this will take an enormous amount of time. So for our recommended list, we have review the general fee structure, but to be sure, you should also review and ensure that your investment strategy aligns with the overall fee comparison that we have performed.

⚙️ Platform Reliability

There is nothing more worse than having a platform crash, right when you want to buy bitcoin at a great exchange rate. And then when the platform is back up online, you discover that the bitcoin exchange rate has moved against you. This could not be more frustrating and annoying. The best exchanges will use expert developers, and most of the time have been in the industry for a while. There are specific industry developers that have built great exchange platforms which is white labelled to both onshore and offshore exchanges.

📈 Liquidity

This is where the big players have an advantage over the smaller ones. Liquidity means a high volume of buyers and sellers. If there is a high volume, then it is easy to liquidate your position, i.e. you can sell out or buy back in without the need to find a buyer and seller. If liquidity is low, then you may find that you will have to wait a long time to find anyone willing to buy or sell – this then means you cannot close out your position quickly and the exchange rate may move against you.

The larger exchanges therefore will have a better pool of buyers and sellers to close out your positions quickly. But be careful! Exchanges deliberately over inflate their trading volumes and dollar value. ALL of them do this, to try and gain advantage over their competitors. How to know then which truly has the best liquidity? It is difficult to say. But we have personally purchased through the larger exchanges and we have compared how quickly it is to find a buyer and seller.

New York Cryptocurrency Exchange Reviews

The world of cryptocurrency exchanges is evolving rapidly, with many new comers joining the blossoming market. By far, there are too many to review. Hundreds, if not thousands, of exchanges should be reviewed. But alas, there are too many of them. For Californians, we have therefore reviewed the “bigger” ones. The ones that we feel warrant a review, and will be around for the long term.

Coinbase

Coinbase is possibly the largest cryptocurrency exchange in the world. It has the most liquidity (prima facie) for Bitcoin as well as for the other top ten traded currencies. It is planning to launch an IPO (float on the stock exchange) in the near future, and will be valued at over a billion (if not billions) of dollars. The exchange is widely used because it offers a simply easy to use layout and functionality, and has established a good reputation as a leader in the industry.

Coinmama

Coinmama is the new kid on the block, but we like them. They are more limited in coin offerings, but are expansive in bitcoin and is available to connect traders globally.

Trading fees tend to lean towards the higher side, from 3.9% and 5.9% depending on dollar value and volume. This may eat into your investment strategy, particularly if you are a day trader. On the flip side, they have invested in a safe and secure platform, and can be found to be reliable and honest.

Etoro

Etoro is a well established financial services company, that first began as a forex exchange offering a fast and reliable platform for trading. They have since expanded in cryptocurrencies and are marketing extremely hard to attract more customers.

Etoro was founded in 2007, creating a platform that is accessible to many countries around the world. Pioneers in providing easy access to financial markets to retail investors, they have now expanded their offerings to Californians into the crypto world. Their customer support can be a little slow at times, with the quality of user advice of their platform a bit and miss.

Their platform, isn’t as user friendly as the others, hence the reliance of customer support. Having said that, they have been around for a long time.

What we don’t like about Etoro is their aggressive marketing campaigns. We understand that marketing is important, however, social media is flooded with “customers” vouching for them. This is a very bad look and in fact, gives the impression that Etoro is a scam site.

CEX.IO

One of the best exchanges in terms of fees. Extremely reasonable and won’t hurt your investment strategy. Offering a wide range of fiat and cryptocurrencies, CEX.IO is a relatively newcomer that is looking to expand quickly in the market. Payment methods are also extremely broad, with credit card, debit cards, wire transfer and e-wallets accepted.

Can they be trusted? Still a bit too early to tell, but they are moving up in size quite quickly.

Kraken

You may have heard of the twins that invested Facebook and took Mark Zuckerberg to court. Well, the twins developed and invested in Kraken, one of the best cryptocurrency exchanges for Americans. The support behind the platform stems from the twins, who also own a large quantity of bitcoin, enabling them to facilitate and sustain an exchange.

According, liquidity is not an issue, with many customers choosing to use Kraken. The platform itself, is smooth with very little latency. Trades can be performed quickly and reliably, with security at the forefront with a three tiered verification process.

In addition, transactions fees, through not the cheapest, are very reasonable.

New York Cryptocurrency Tax Ruling and Rates

Digital currency use is governed by the State Law 23 NYCRR200, which requires businesses that operate to acquire a “BitLicense”. This framework is established by the New York State Department of Financial Services and extends to any dealings that involve cryptocurrencies or blockchain. In acquiring the license, a business must have evidence that they are able to meet strict compliance rules, have policy and procedures in place, can perform thorough Know-Your-Customer (KYC) checks and prevent money laundering.

The policy is so onerous, such that, many businesses that used to operate in New York have left the state because it simply is logistically impossible to fulfill all the requirements. And if it were possible, operating a business would become unsustainable, both in terms of profit and providing a service which does have benefits. At present the rules are so strict that all benefits of trading or investing with cryptocurrencies is removed, i.e. it is pointless to the degree that it becomes a liability to even be involved in the digital currency industry in New York.

In 2016, a challenge against the laws was taken to the Supreme court by Theo Chino. Chino argued that the Bitcoin community were being unfairly targeted with new banking regulations without proper and due engagement process. You can refer to this link for further documentation https://www.article78againstnydfs.com/raw.php.

As a result of this challenge, a task force was established in 2018 to examine the governance and framework for digital currencies, and how state laws would interact with Federal laws by the SEC and the CFTC.

In 2019 and avalanche of bills were proposed to be approved that would legalize the payment of goods and services with digital currencies. In addition the definition of cryptocurrencies began to develop into the form of property, smart contracts and electronic signatures were considered, and support for blockchain start ups were debated.

Though there is much activity in New York supporting blockchain and cryptocurrency initiatives and innovation, the red tape is simply overwhelming and, ironically, is discouraging rather than supportive.

Minimum Legal Age

The minimum legal age to buy and sell bitcoin in New York is 18 years old.

Summary

New York has introduced digital currency laws that are at the forefront of addressing and clarifying how to operate and run cryptocurrency businesses. Unfortunately, as an exchange operator, the laws are so onerous that it becomes unsustainable to operate an exchange within New York. This is to the detriment of the public, because it means (ironically), that the only avenue that bitcoin and cryptocurrency investors and traders can turn to is the offshore market.

The offshore market, though much more diverse and accessible, poses risks of less compliance, supervision than one might want.

On a promising note, policy in New York is evolving. Let’s hope that it brings forth policy that can meet the needs of the public but at the same time give the right supervision needed to ensure a safe and secure investing environment.