04 Jun New York Reveals BitLicense Framework for Bitcoin Businesses
The New York Department of Financial Services (NYDFS) has released its long-anticipated list of proposed rules and regulations that will be required for New York-based bitcoin businesses.
The regulatory framework is the result of more than 18 months of work from the NYDFS and is designed to boost consumer protections and guard against money laundering while still helping to nourish the nascent bitcoin industry. NYDFS has regulatory oversight over dozens of N.Y. licensed banks and insurance companies, including Goldman Sachs, MetLife and Barclays.
The 44-page document of final rules released Wednesday explains such details as cost of an application ($5,000) for a license, as well as what the license will allow companies to do.
“License required,” the document warns. “No person shall, without a license obtained from the superintendent as provided in this part, engage in any virtual currency business activity.” In other words: No license, no bitcoin activity in the Empire State.
The barriers to entry can be high. Companies seeking a bitlicense will need to have a compliance officer, for example, who will be responsible for making sure the firm is in compliance with its bitlicense rules, and all other applicable federal and state laws that apply to bitcoin, such as money trasmitter laws and laws to protect against money laundering. Such protections can get expensive.
In remarks issued by NYDFS at the BITS Emerging Payments Forum in Washington, on Wednesday, superintendent Benjamin Lawsky clarified that the final regulation meant firms will no longer need the agency’s approval for each new software update or round of venture capital funding.
Additional changes include the fact that companies can now satisfy BitLicense and money transmitter license requirements simultaneously with a “one-stop” application submission.
Overall, Lawsky was tepid in his optimism about the technology, reiterating past statements that suggest he believes bitcoin or other decentralized blockchain technologies could bring about needed change in the financial sector:
