It is definitely sure that the state of New York was never been really crypto-friendly and this story dates back to the NYDFS introducing the BitLicense requirement for all Bitcoin service providers many years ago. We agree that cryptocurrency regulation is essential but the fact is, that most regulatory authorities, after Mt. Gox saga happened, have been creating oppressive laws that are definitely not doing anything good for the industry.
BitLicense proposal says, in short, that all companies must keep at least a ten-year record of their transactions. It is also compulsory for firms to invest in New York bonds. It also proposes necessary background check required for employees/founders with their fingerprints submitted to the FBI. The companies have to submit quarterly financial statements within 45 days of the closing of each quarter and all financial statements must be audited using GAAP.
Is it possible to abolish the BitLicense?
It seems that things are a-changing with bitcoin enthusiasts in New York rising to fight against this regulation. Last Friday, New York state senator Jesse Hamilton, said that the controversial 2015 regulation may soon be “reformed”.
“Anyone in the crowd that does not think the BitLicense needs to be reformed,” Hamilton asked and no one answered. “We’re going to do this again in a month, month and a half from now,” Hamilton added.
State Senator David Carlucci confirmed that a bill to reform the regulation could be introduced “very soon.”
The truth is – that this is no way cryptocurrency regulation should be made. BitLicense, as it is today, has a lot of potentially unnecessary legal requirements for companies attempting to obtain it. In the early days, it was expected that the legal fees alone would add up to $100,000 or more just to get the paperwork in order.
However, it seems that not everybody agree on this. This month, South Korea said that they are considering adopting an approval system for crypto exchanges based on New York’s BitLicense system.
A government official spoke to them about the option as part of a virtual currency taskforce:
“We are positively considering the adoption of an exchange approval system as the additional regulation on cryptocurrencies. We are most likely to benchmark the model against that of the State of New York that gives a selective permission.”
A different unnamed government official said:
“Some even say that the government should impose taxes instead of putting additional regulations if the market volatility remains same at the current level. We will hold a meeting to respond to [the] national petition related to digital currencies this month but we are highly likely to make up for the defects of existing measures only at the meeting.”
Last week they startied to slightly change it’s opinion on cryptocurrency trading. The governor of the Financial Supervisory Service, Choe Heung-sik, then said the government “will support cryptocurrency trading if normal transactions are made,” and added that the government will “encourage” banks to work with cryptocurrency exchanges.