A bill to Abolish BitLicense in New York?
“NOTWITHSTANDING ANY OTHER LAW, RULE OR REGULATION, NO PERSON, CORPORATION, PARTNERSHIP OR OTHER ENTITY THAT CONDUCTS CRYPTOCURRENCY BUSINESS ACTIVITY SHALL BE REQUIRED TO PAY A LICENSING FEE IN ORDER TO CONDUCT SUCH CRYPTOCURRENCY BUSINESS ACTIVITY.”
These are perhaps the most beautiful and unexpected words for any New Yorker who has ever thought of having a business related to cryptos.
According to the official website of the NYS Senate, Democratic Senator Ron Kim has proposed a Bill which, should it become Law, would replace the controversial and infamous BitLicense, benefiting businesses and enterprises prone to establish themselves in the region.
The BitLicense is an authorization of operations mandatory to any New York business that has a focus on virtual currency business activities including:
Receiving virtual currency for Transmission or Transmitting virtual Currency, except where the transaction is undertaken for non-financial purposes and does not involve the transfer of more than a nominal amount of virtual currency;
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, or;
Controlling, administering, or issuing a virtual currency.
However, the formalities and bureaucratic procedures are so excessive that since its inception, the license has been a shame to the State of New York and the blockchain community in general. Even more so if it is taken into account that shortly after its enactment, Benjamin Lawsky, the person responsible for its creation, resigned his position as New York State’s Superintendent of Financial Services to found the Lawsky Group: a consulting firm that “provides in-depth counsel and strategic advice” on legal and economic issues such as how to obtain the BitLicense, providing solutions to the problems that he personally created.
This law has generated so much reject and negative comments that not only some marches and protests have been organized against it, but it has also caused a massive exodus of world-famous startups such as Xapo, Bitfinex, BitQuick, BTCGuild, Eobot, Genesis Mining, GoCoin, Kraken, LocalBitcoin (available on Coinbase)s, Paxful, and Poloniex.
To date, only 3 companies operate with BitLicense: Circle, Ripple (available on Binance), and Coinbase. Minimal adoption, mass exodus, and rejection of an entire ecosystem, led members of the New York State legislature to consider abolishing it, creating a better image for the state and attracting large investors again. Hopeful to put New York back in the spotlight for cryptocurrency aficionados.
The efforts of Ron Kim and the State of New York, along with those of other states, provide relief against the climate of uncertainty that was experienced in previous months when official bodies seemed to be pointing towards more severe regulations and even contemplating the banning of cryptocurrencies in some countries.