... should be flown a sufficient distance from populated areas
Am I to understand that you don't consider midtown Manhattan a "populated area"?
In theory, all aircraft (except toys, of course) are required to have an airworthiness certificate, as per FAR 91.203.
This vehicle would be considered a toy. The operators were certainly using it as a toy.
If I have not seen so far it is because I stood in giant's footsteps.