The recent approval of Genesis Global Trading’s BitLicense[1] application has shone fresh light on New York State’s relationship with the cryptocurrency industry.
Although New York is historically a business-friendly center and international financial hub, many industry players have criticized the regulatory requirements enforced by the New York State Department of Financial Services (DFS) through the BitLicense since its release date in 2015.
Most of these criticisms were confirmed in a round table[2] held earlier this year by New York State senators Jesse Hamilton and David Carlucci, who invited cryptocurrency companies to raise their concerns about the BitLicense.
Stakeholders reiterated that the regulatory requirements set by the DFS are too burdensome for small companies to bear, that it’s a one-size-fits-all regulation and ultimately that it stifles innovation
Even before the initial release of BitLicense back in 2015, the Editor of MIT Media Lab Digital Currency Initiative, Brian Forde[3], alluded to the fact that this is what will happen, with only the largest companies possessing ample resources able to comply with the strict regulations.
“If changes to the proposed BitLicense are not made, only a handful of the most well-funded companies will survive — not because they are providing the best product or service, but because they have access to the most money.”
BitLicense explained
The BitLicense is issued by the DFS to those able to meet regulatory requirements and engaging in one of the following activities[4]:
- Virtual currency transmission
- Storing, holding, or maintaining custody or control of virtual currency on behalf of others
- Buying and selling virtual currency as a customer business
- Performing exchange services as a customer business
- Controlling, administering, or issuing a virtual currency.
The DFS has also indicated that cryptocurrency mining will not form part of
