Next thing you know, the exchanges are regulating "crypto-sanctuary cities". Examples: we will not allow residents of California, but we will allow people from San Diego! Or we will not allow residents of New York, but we will allow people from New York City! Or we will not allow residents of Illinois, but we will allow people from Chicago!
Unfortunately this could begin appearing in the near future.
why do you think so?
if an exchange allows chicago residents they need to comply with illinois state laws anyway, otherwise they'll run afoul of state regulators pretty quickly. might as well allow all illinois residents, amirite?
Cities could fight the opposite direction too. Examples: Silicon Valley can ban Coinbase. New York City can ban Binance. Chicagoans can fight to ban Gemini.
unlikely since they are financial/money service businesses. these are usually regulated under state and federal laws, not municipal laws. theoretically possible i guess.