August 24, 2016
New York Releases Final Bitcoin Regs
June 11, 2015
Last week, the state of New York released its final rules regulating Bitcoin businesses that want to operate there. In one of his last official acts as superintendent of the New York Department of Financial Services (NYDFS), Benjamin Lawsky delivered a speech in Washington, D.C., outlining the rules, which came nearly a year after the first draft was proposed. Lawsky said the “regulatory touch” of the final rules is considerably lighter than some of the earlier versions.
Most importantly, software developers do not need a BitLicense, Lawsky said, only companies holding other people’s money in trust. Other changes from earlier versions include dropping a requirement for companies covered by a trust charter to also apply for a BitLicense and vice versa, not requiring companies that report suspicious activities to a federal agency to also report to NYDFS and eliminating the need for “passive investors” to be approved by the agency.
Bitcoin advocates, however, are not as convinced the NYDFS rules constitute a “light touch.” Jerry Brito, executive director of the cryptocurrency research and advocacy group Coin Center, acknowledged Lawsky’s willingness to hear industry concerns, but says the final rules are “far from perfect.”
“Despite the changes to anti-money laundering requirements that the superintendent cited in his speech, the final BitLicense still creates an unprecedented and discriminatory state-level AML reporting obligation,” Brito said. “The new language is vague and unclear about how compliance with federal regulations will exempt a BitLicensee from those state-level obligations. The only consolation is that now businesses have clarity on some other obligations. It’s a mixed bag, is the best that can be said about the BitLicense.”