China Weighs in on N.Y.’s Proposed Bitcoin Regs

Aug. 28, 2014

China Weighs in on N.Y.’s Proposed Bitcoin Regs The impact of proposed legislation regulating Bitcoin in the state of New York is reaching all the way to Beijing. CEO’s of the three largest digital-currency exchanges in China sent a joint letter to Benjamin Lawsky, superintendent of the New York Department of Financial Services (NYDFS), last week, noting that the outcome of New York’s decision on Bitcoin will serve as a model for “regulators around the world.” Bobby Lee of BTC China, Lin Li of Huobi and Mingxing Xu of OKCoin took the opportunity presented by an extended comment period to urge the NYDFS to make changes to its proposal.

The men took exception to the overly broad definition of “virtual business activity,” noting that the proposal, as written, “would arguably subject the companies to licensing requirement even if they engage in trivial amounts of business” with New Yorkers.

“If the proposal were already in effect,” the trio wrote, “without the NYDFS’s prior approval, BTC China could not have rolled out its mobile exchange for virtual currency in China; Huobi could not have acquired a Chinese provider of virtual currency storage services; and OKCoin could not have launched an international version of its trading platform.”

The comment period, which originally was slated to expire on Sept. 8, was extended last week until Oct. 21. In a published interview, Lawsky noted the NYDFS understands the regulation it passes will affect subsequent regulation around the world, which “gives us an additional responsibility to do our very best to get it right.”