Topic: New York's Bitcoin Regulation Comment Frenzy Reflects Its National Importance (Read 695 times)

New York’s Department of Financial Services is extending the comment period for its bitcoin regulation proposal by a month and a half after getting deluged by thousands of comments and requests for more time. Even extending the deadline until October 21 isn't enough according to some of the letters its received. The blizzard of interest from people and organizations on a national scale shouldn't have been a surprise to the regulators though. What the state of New York, with all its financial weight, decides to do about regulating bitcoin and other cryptocurrency, has huge implications for the technology on a national scale.

The frenzy of commenting began almost immediately after superintendent of financial services Benjamin Lawsky announced the proposed regulations back in July. The draft rules cover the usual arenas of money laundering, security and protecting consumers, requiring companies involved in virtual currency to get a "BitLicense" to operate in New York and holding them accountable for customers. It's a staggering advance in what until now has been mainly a piecemeal kind of regulation. Perhaps understandably, a letter from the Bitcoin Foundation was among those asking for more time.

"With some important, sophisticated exceptions, the Bitcoin community is not well-versed in New York financial services law or regulation," the Bitcoin Foundation wrote. "It takes time to gather the meanings of legal terms of art and to compare them with emerging technologies, processes and business models in the Bitcoin world."

There's been very mixed reactions to the proposed framework by bitcoin users and companies. People who like crytpocurrencies precisely because of its lack of regulation don't like the idea of any new rules. Others may approve or at least accept that bitcoin will be regulated, but think the proposal goes too far and is even stricter for bitcoin companies than the rules for traditional financial institutions.

"We have sought to strike an appropriate balance that helps protect consumers and root out illegal activity – without stifling beneficial innovation," Lawsky said in a statement when the rules were announced. "Setting up common sense rules of the road is vital to the long-term future of the virtual currency industry, as well as the safety and soundness of customer assets.


http://inthecapital.streetwise.co/2014/08/21/new-york-bitcoin-comment-frenzy-national-importance/