The Bitcoin Community Reacts to the NY BitLicense

The New York State Department of Financial Services (NYDFS) yesterday released the third and final revisions to its BitLicense legislation.

The New York State Department of Financial Services (NYDFS) yesterday released the third and final revisions to its BitLicense legislation.

The updates are aimed at improving functionality within the industry and making sure businesses are compliant without stifling innovation. Two previous versions of the regulations received much criticism and the third is no different.

Here are some Bitcoin community reactions to the updated NY BitLicense:

Jesse Powell, co-founder and CEO, Kraken:

“The heavy compliance costs on digital currency exchanges will make it much more difficult to operate a profitable exchange in the state. Many fear it will stifle innovation in the industry and exclude New York from the developing currency.”

The New York State Department of Financial Services (NYDFS) yesterday released the third and final revisions to its BitLicense legislation.

The updates are aimed at improving functionality within the industry and making sure businesses are compliant without stifling innovation. Two previous versions of the regulations received much criticism and the third is no different.

Here are some Bitcoin community reactions to the updated NY BitLicense:

Jesse Powell, co-founder and CEO, Kraken:

“The heavy compliance costs on digital currency exchanges will make it much more difficult to operate a profitable exchange in the state. Many fear it will stifle innovation in the industry and exclude New York from the developing currency.”

The New York State Department of Financial Services (NYDFS) yesterday released the third and final revisions to its BitLicense legislation.

The updates are aimed at improving functionality within the industry and making sure businesses are compliant without stifling innovation. Two previous versions of the regulations received much criticism and the third is no different.

Here are some Bitcoin community reactions to the updated NY BitLicense:

Jesse Powell, co-founder and CEO, Kraken:

“The heavy compliance costs on digital currency exchanges will make it much more difficult to operate a profitable exchange in the state. Many fear it will stifle innovation in the industry and exclude New York from the developing currency.”

Ryan Selkis, director of investments, Digital Currency Group, objected to the failure to exclude multisig:

“This is an inexcusable oversight. This point was highlighted repeatedly and loudly for past nine months. Defining and regulating key ‘custodians’ was literally the only area of incremental value you could offer: failure. Now that this is set in stone, let's call this oversight what it is: intellectual laziness. Very disappointed.”

Roger Ver, angel investor:

“If someone about to do something productive has to ask a bureaucrat for permission, both they, and the bureaucrat, are kept from producing something of value, and the world is worse off as a result.”

@ruperth responds to #bitlicense on Twitter:

Not all of the responses were negative, however, with some members of the community expressing positive feelings and optimism over the new regulations.

Ribbit.Me

Jaron Lukasiewicz, NYC-based Coinsetter CEO, said:

"As a New York City-based exchange, we have awaited regulatory clarity from New York that enables us to offer better deposit and withdrawal methods to customers. Most execs in the industry still feel that the final BitLicense rules are fairly ambiguous, but I hope the DFS will work with the industry to help it grow.

My use of the word 'hope' highlights an issue we see with financial regulation today. There is an extreme lack of clarity from our perspective as an innovating company in terms of what will be required of us to obtain a license in any state. Coinsetter will submit an application to the NYDFS that we believe merits licensure. We will also continue pushing to offer innovative products that help enhance personal freedom and create low cost ways for the underbanked to transfer money.

Our company has verbalized an understanding of working alongside regulation for many years now. Now that the BitLicense is approaching, I hope that the NYDFS and other state regulators will help support fast innovation in financial technology startups through extreme flexibility and low cost burden."

Brian Forde, director, MIT University's Digital Currency Initiative

Brian Forde says the final product “is good for consumers in New York who will get the innovative financial services of the future from upstart entrepreneurs and large companies, faster.”

So will regulation help or hinder companies operating in the Bitcoin space? Will it put the  brakes to innovation? Ben Lawsky thinks not, but in truth only time will tell if New York has assisted or damaged the development of digital currencies, and whether other states will follow its example.