How to Buy Crypto in New York: Best Bitcoin Exchanges

Best Alternative Ways for NY Residents to Buy Crypto

Though there aren’t a ton of crypto exchanges that have a BitLicense to sell digital assets to NY residents, there are a couple alternative platforms that do have their BitLicense. Below are two of the best alternatives for residents in New York to buy crypto.

The Origins of Bitcoin in New York: How It All Started

New York has long been one of the world’s financial centers, and when crypto came onto the scene over a decade ago it was no different, exchanges and services were abundant in the state. But as the industry grew, the state became more restrictive and regulatory with digital assets, introducing a requirement that all businesses doing crypto related activities in the state or for residents of the state have something called a BitLicense.

A BitLicense is a business license issued by the New York State Department of Financial Services (NYSDFS) for virtual currency activities. This includes holding crypto on behalf of others, exchanging it, controlling it, buying, selling, etc. Essentially, if you do not have a BitLicense, you cannot do anything crypto related in New York or for its residents.

When it was introduced, many businesses left the state, as the requirements were far too strict for most exchanges to bother to comply with. It would be an understatement to say they had harsh words for the NYSDFS. Still, exchanges such as Coinbase and Gemini complied, and there are now over 20 entities with BitLicenses, meaning crypto is still very much alive in the state. It did take two years for Coinbase to get approved though, which means there was very little crypto activity for a while.

More recently, the New York Attorney General (NYAG) cracked down on crypto lending platforms (where customers receive a yield on their crypto), alleging that two platforms in the state have engaged in unlawful activities while ordering three others to provide information on their businesses. It is yet another bump in the road for those trying to do crypto business in New York and comes on the heels of the settlement with Bitfinex and Tether who agreed to pay over $18 million in damages. Time will tell what effect the current crackdowns will have on crypto in New York, but it is certainly not going away.

Buying Cryptocurrency in New York: A Step By Step Guide

Step 1: Find a crypto-trading service that’s in-line with your needs

Cryptocurrency exchanges are a convenient option because you can enjoy a plethora of features and they offer more options for trading. As an investor, you can buy, sell, and hold crypto. In addition to this, as a user you can transfer your crypto to your online wallet for later use. 

Step 2: Link your selected exchange to a payment option

This process is similar to setting up a brokerage account and it all depends on the exchange of your choosing. You have to provide personal identification. This can be in the form of your social security card, drivers license, employment history and income statements. 

Step 3: Set up an order type and start investing

Thanks to modern technology, crypto exchanges have evolved and now offer very similar features as their stock brokerage affiliates. Cryptocurrency exchanges offer several ways to invest and order types to choose from. These days, most crypto exchanges offer both market and limit orders, and some advanced ones also provide stop-loss orders.

Step 4: Safe storage is a priority

You can’t put a price on online security, it’s so crucial. This is where Bitcoin and other crypto wallets come in, they allow you to store your digital wallets safely. Personal wallets ensure that you, as the investor, have full control over your funds conveniently. Yes, exchange wallets are handy, but we wouldn’t recommend them for large or long-term cryptocurrency holdings.

Navigating All the Laws When You're Buying Crypto

It’s important to note, it is legal to buy cryptocurrency in New York, however, it’s not legal to operate a crypto based business in New York, without holding a valid BitLicense.

This means, as a New York resident, you have limited options to purchase cryptocurrency, but that does not restrict your right to purchase digital assets. The state has some of the strictest crypto regulation in the country, but there’s still a way.

Find the Best Ways to Get Crypto in the Big Apple

The best way to get cryptocurrency in New York is through a crypto exchange such as Coinbase or Gemini, two of the world’s top crypto exchanges that hold valid BitLicenses, meaning they can legally conduct cryptocurrency business in New York.

Another good option for those who are more familiar with stocks is to purchase crypto through the Robinhood app, which got its BitLicense in 2019.

At the end of the day, NY residents have less options for buying crypto but the ones they do have are very good and highly regulated.

How to Buy Bitcoin in NY

Bitcoin enthusiasts will be happy to know that you can buy Bitcoin in New York state, through an online exchange or service with a valid BitLicense or at a Bitcoin ATM.

Online cryptocurrency exchanges such as Coinbase make it easy to purchase Bitcoin with a credit card, debit card, bank transfer, or bank wire. Usually there are higher fees when purchasing Bitcoin with a credit card or debit card compared to a bank transfer, something you need to take into account when deciding your purchase method.

New York residents can also buy crypto through an app such as Robinhood, which has a valid BitLicense as well.

How To Buy Crypto in New York

If you’ve never purchased cryptocurrency before than you might be surprised to learn the process isn’t all that different from signing up for a new bank or a stock-trading platform like Robinhood or SoFi.

The steps vary slightly from platform to platform but in general it will look something like this:

1. Pick your crypto exchange of choice.
2. Sign up (you’ll need a viable email address).
3. Provide KYC (Know Your Customer) documentation like driver’s license, passport etc.
4. Fund your account through credit card, debit card, wire transfer or bank account (ACH, SEPA).
5. Purchase your crypto of choice.
6. Optional: Withdraw to a private wallet.

The entire process is relatively easy and should only take 5-10 minutes although sometimes getting your identity verified or getting a bank transfer through can take up to a few days.

Understanding How Coinbase Works

Coinbase is one of the major exchanges that successfully acquired a Bitlicense, so it’s fully available in the state. Gemini is the other well-known exchange that acquired a license so both exchanges are excellent options for NY residents.

There are, however, some big-name exchanges that are not available in NY. One of the most famous is US-based Kraken exchange. Founder Jesse Powell famously referred to the Bitlicense as “a foul creature” so it seems unlikely Kraken will re-enter the state anytime soon.

Here’s a list of some of the notable exchanges not available to NY residents:

• Kraken
• Binance
• Crypto.com
• Kucoin
• Voyager

A Breakdown of How Gemini Works

Gemini is the other major crypto exchange that works in New York. Gemini founders Cameron and Tyler Winklevoss are based in New York so they were at the forefront of crypto regulation when the Bitlicense was announced.

Gemini became the very first licensed Ethereum exchange based in the USA when it was approved in 2016. These days New York residents get access to the majority of Gemini’s portfolio and can buy the coins and tokens they desire from Bitcoin to Ethereum.

The exchange is celebrated for its security, which makes it an excellent choice for those based in New York.

Here's the Cheapest Way to Buy Crypto in New York

The cheapest way to buy crypto in New York is through a crypto exchange or trading platform such as Coinbase, Gemini, or Robinhood. Which of these options is cheapest for you will depend on a variety of factors including your funding method, the amount you are purchasing, and what asset you are buying.

Generally speaking, the more instantaneous method, such as a debit or credit card purchase, have the highest fees and increase your purchase price the most, while bank transfers have the lowest fees but take the longest.

Can I Sell My Bitcoin?

You can sell your Bitcoin or any other of your crypto assets through any crypto trading platform.

If your digital assets are not already on the exchange you will need to send them from your wallet. Once your coins or tokens are on the exchange you can sell them for market value, and then once they are sold you can withdraw the funds to the bank account you connected to the exchange. Keep in mind that you will be taxed on any gains made selling cryptocurrency in New York (and the US in general), similar to any situations where there are capital gains.

Is it Possible to Buy Other Cryptocurrency with Bitcoin?

It’s possible to buy any other available cryptocurrencies with your Bitcoin, as long as the trading pair is available on the exchange you are using.

Swapping crypto is actually easier in New York than buying Bitcoin or other cryptos with fiat, because you do not generally need to complete Identity Verification through exchanges unless you are connecting a bank account. That said, with Coinbase and Coinbase Pro being an option for NY residents, there is already a fast and easy way to buy Bitcoin along with about 100 other coins and tokens.