Topic: New York imposes a permit for Crypto companies (Read 313 times)

This is nothing new...

The license was introduced and designed by Benjamin Lawsky, New York's first Superintendent of Financial Services, in July 2014. He made this application for the BitLicense so complex that it was almost impossible for businesses to apply for it, without "consultant" assistance. Guess what happened next.... he joined a consultant firm that charged people to help them with the applications for the BitLicense. 

The BitLicense was created for two reasons... He wanted to create a complex application process to enable a situation where there was a barrier to entry to slow Bitcoin down and he knew he wanted a back door job, if he was not elected as the Superintendent of Financial Services again. 

part of bitlicence is that those financial institutions with banking charters do not need a bitlicence, meaning that banks could easily offer crypto services without any extra expense of compliance in regards to crypto.
this will certainly cause banks to be more competitive than smaller businesses trying to start up in the crypto space.

its much like the SEC is holding off on offering 'spot price' ETF's because i feel they are waiting for an institutional bank/financial firm to set up their collateral to then offer a ETF whereby the 'old boys club' institutions get to monopolise the market while adding hurdles for outsiders

one idea is that greyscale(blockstream) which is partnered with many of the wallstreet old boys is lined up to take the top spot of the the first ETF.. rather than say the winklevoss twins

The government is now pushing itself to get involved and be a part of cryptocurrency. It was really understood not just they want to minimize the growing scamming and fraud incident who are using digital currencies but what I see is that they are aiming to have full control of the market and then have the power to manipulate and collect taxes.

Well, I'd see this having a huge impact on crypto adoption there in NYC. This will not even encourage small establishments to offer acceptance of crypto.

Texas and California is definitely much better, it allows people to be a lot more free when getting a license, and it allows people to grow. Coinbase is a company based in California and they had a stock listing last year, that should show you how much you can grow when you are there. They got listed in Nasdaq if I am not wrong, which proves to everyone that we are talking about a great growth rate if you are there.

New York is losing customers and money this way, it is not something they should be proud of, I mean not like these companies are amazon like places, they are actually paying their employees good and allow people to make money as well.

New York is the best example of how the government can be able to regulate a certain industry to the extend that it is already virtually choking it with so many requirements that must be submitted before one can do business. You are not only overtaxed here, the policies can be changed anytime those in power wish to do so. Now, what is the best thing to do? Get out of New York and go somewhere else where regulations can be really friendly like Texas or maybe Florida which are politically under the influence of the conservatives. I am sure there is a bigger market away from New York.

I agree with this. Despite that we welcome regulation in open arms, the downside of it are the high taxes and spending too much money complying with the necessary requirements and licenses to operate within the area. I think the government should be reviewing these again and must listen to the concerns of those who aren’t in favor of this and needing adjustments.

you dont need to physically exist in NY to be beholdened to needing a licence just to serve NY customers.
so in the entire world of thousands of businesses.. only 30 have succeeded in getting a bitlicence to serve NY citizens. the other THOUSANDS of businesses have to IP ban NY customers and reject serving customer that reveal that they live in NY

yet. an exchange can serve texas customers with no need to get licenced. because texas does not view crypto as a currency nor money.

oh.. and by the way. NY does recognise crypto as currency and money. so not only do you need a bit licence for the bitcoin side, but also a money transmitter licence for the fiat side.

i see texas as being more bitcoin friendly...
.. the fatal flaw of bitcoin was when it was reclassified as a currency/money instead of a asset product.
being an asset product, services are treated just as retailers when doing swaps for fiat. (the route texas currently sees it)
being a currency/asset triggers the whole fiat licencing(many states including NY) but NY has a separate licence ontop of the fiat licence requirements

According to this statement, it is possible that the access of companies in New York that wish to operate with crypto will improve, this should be faster and less expensive and thus the government will allow the growth of crypto companies in the state.


A Faqs about BitLicense clarifies the doubts but the reality is different there are very few companies that achieve the BitLicense.

https://www.dfs.ny.gov/apps_and_licensing/virtual_currency_businesses/bitlicense_faqs

If we want more trust on this market, regulation is one of the things that I think we can't avoid from. Because if people especially noncrypto users will see that the crypto-related businesses are registered and under the jurisdiction of their government, they will have more confidence in trusting their funds. We are already submitting KYC in most of the exchanges that we are using particularly those local crypto exchanges that we need to convert our crypto to our local fiat, so the regulation is indeed expected from the government. I am also at peace to use a trading platform which is registered in the Central Bank of my country.

It is sort of inevitable that this would happen, first they welcome in lots of crypto focused companies with seemingly lax laws and inviting politicians, then they do a little snapback. Not that you should feel particularly aggrieved by this because it is unlikely to affect the majority of people and it purely targeted at the large scale companies that moved in. These companies, let's use exchanges as an example, are making absolutely huge profits from the fees they charge and they get the "prestige" of using a New York address for their company, which can give them increased credibility. The people affected by this are already doing very well, so such fees will likely only amount to a tiny fraction of their profits any way.

Opposing regulations is not necessary at the moment. All exchange demand KYC verification to keep up to the licensing terms although some are more fair than the others. But no matter how strict the KYC verification might appear there will always be a limit. Gradually many are seeing the need to incorporate crypto into the society they measure the use is not necessary at the moment

So that means any NYC-based escrow provider that wants to legally offer its services, has to pay a "ridiculous fee ^{[apart from other issues]}" to obtain that license ^[SMH]!

There is no way Any governmental body is going to leave crypto just like that, to make sure they are able to regulate it and earn profits from it they usually try to make sure that people's choice comes from them getting profits as well, therefore they have higher tax on such regulatory affairs like cryptocurrencies like bitcoins.

At the same time cryptocurrencies are essential for the gambling market of the whole country perse from where they earn millions of dollars which does mean that they are not going to ban it for sure. I do think regulation is a bit better than them banning it and trying to force people to use things like CBDC's at least they are far off from that as well.

These measures were to be expected. Not only to expect, but also to prepare for them

New York has always been anti-crypto for a long time now and I am not surprised by these new measures to be honest. They keep trying to manipulate and regulate cryptocurrencies in various ways since they know that cannot completely ban them.

All these restrictions are basically cutting down the difference between FIAT and crypto which is a bad thing which is why I don't support these new measures.

True with a BUT.

It is less intrusive and has less financial requirements to get a bilecense to operate in NY then it is to get a license to operate a BTAM in some states.
That is the catch. NY came out and said it, "If you want to operate here you have to do this" other states whisper it and you don't know about it till it bites you in the ass.

As someone pointed out to me, want to operate 5+ BATM in TX.
You need to have a net worth of $500k
https://www.dob.texas.gov/sites/default/files/files/consumer-information/sm1037.pdf

If you want to operate in NY where there is a lot of money, you have to play by the rules.
If you don't want to operate in NY, fine there are 25+ places that can with more coming in:
https://www.dfs.ny.gov/apps_and_licensing/virtual_currency_businesses/regulated_entities

-Dave

i guess the NYC mayor didnt get to do much..
.. i thought he got elected by saying he wants to help support crypto and reduce the regulations that have stalled out NY growth over the last 4 years. (yep bitlicence has held back NY crypto innovation)

anyway the bitlicence does not just affect businesses where their HQ is in NY. it affects any business world-wide where by they wish to service customers living in NY

yep right now many world wide businesses have simply just IP banned any customer in NY area.
that said, certain exchanges that already have the bitlicence love it. because it becomes a barrier of entry for other/new businesses.. meaning less competition. meaning NY customers are forced to use the limited amount of licenced services meaning those licenced companies get a large share of user-base, compared to a free-for-all situation where licences are not required.
yep those exchanges with a bitlicence are few yet they get the benefit of serving majority of NY users without much competition. its why they didnt really push hard to stop or atleast tweak the bitlicence to be less invasive.

....
although i dont think average joe basement dweller on his moms laptop should be able to set-up his own exchange and be in custody of billions of dollars of assets, without any proof of experience or understanding of responsibility.. but.. i think that trying to cause barriers for responsible and ethical businesses(especially proven experienced small business owners) should not be a thing that regulators should help push along (monopolising the market/centralising the market to only select few businesses)

im not saying remove all regulation and have a free-for-all to let every basement dwelling scammer pretend to be a official business.. im saying some of these regulations dont actually benefit the customer or the business and are done just to cause a utopian idea of monopolising the market, where there are losers

Currently, how do you actually verify if an exchange is verified? In general, after a few disappearing stocks even those that I had relative confidence in, I have a lot of doubts about investing in this type of solutions.

I read somewhere of an articled comparing doing crypto-based business in New York and Florida. Of course, the winner is Florida all because new York is now known to be a location where you have to deal with so many regulations and these regulations can be changing anytime so there are so many things you got to do and be required. So in my mind, why do business in there when there are many other states who are offering welcoming arms with war hugs and kisses? While I believe that we need regulations to make the level the playing field and to protect the people, too much of them can be stifling already.

I feel like New York was never really beam of crypto world in the USA anyway. California could have a lot of downsides, there could be a lot of "homeless" person (not the same way as other nations, it is basically just a lack of home situation, there are actually people there who earn enough to pay rent in other states but can't in LA, that is why) and drugs and crime and many other things. But the laws there are good to crypto companies.

Kraken just shut down their San Fansisco office because of high crime rate, so it is not perfect to have a business, but for the crypto laws, it is much better than New York for sure. Texas is getting better for miners as well.

It was foreseeable that the regulations would only be burdensome in terms of license fees and taxation. This should be big news, but if in reality it will make it more difficult for licensed companies to make a profit while on the other hand they have to get a license, then there are only 2 options, namely to apply for a license or leave the area.

Such kind of regulations will increase the expenses of crypto companies if they want to setup their offices in NY or any other states in US. Corporate and legal Compliance is usually expensive affair and not start-up friendly. If NY becomes very stringent on those rules, crypto companies will possibly move their jurisdictions or even countries.

But considering the integrity of crypto businesses and to keep the scams away from the cryptospace, regulation is necessary!

to many rules in NY

i mine and hold new york coin 

i trade NYC with BTC . my gains i keep in BTC not in euros

They can object but why engage in the crypto business when they don't have the capital to begin with? It's important that they are liquid to be able to support or sustain their activity. The bitlicense capital requirement should be just a formality to them.

These are the individuals or companies affected by the rule by the way,
Taken from https://www.dfs.ny.gov/apps_and_licensing/virtual_currency_businesses/bitlicense_faqs

Both New York and the rest of the United States constantly involve cryptocurrencies in a regulatory framework in order to maintain control and benefit this territory as a whole, they have already imposed several regulations for the use of these digital currencies and now in the New York city the department of financial services aims for all cryptographic companies to have the BitLicense permit so that they can operate legally, with this the NYDFS will be able to work the same as with traditional financial institutions.

In addition, the department states that:

 


There are those who oppose these restrictions, since they demand certain requirements, affecting their performance in the industry for not being able to register in the state. I believe that these measures will greatly benefit the country, generating more income, however many Crypto companies may be harmed.

Taking into account the new conditions of the State of New York, could some important crypto companies be left out?



SOURCE : https://beincrypto.com/new-yorks-crypto-regulation-takes-new-dimension-with-new-provisions/