On Wednesday, February 4, a new version of New York’s BitLicense proposal was made public by the New York Department of Financial Services (NYDFS). The collection of potential regulations was conceived by the department’s superintendent, Benjamin M. Lawsky, in 2013 and is designed to allow the state to oversee any businesses that use virtual currency. While some bitcoin users do favor this supervision, the majority of the community considers it overbearing and potentially destructive to cryptocurrency-related enterprise.
Before creating the BitLicense proposal, the NYDFS held bitcoin hearings in January, 2014. Input was provided from people like Cameron and Tyler Winklevoss, the Facebook founders who currently hold a significant stake in bitcoin, Charles Lee, the creator of litecoin, and Fred Ehrsam, a Coinbase co-founder.
Six months later, the regulations were drafted and released to the public. Lawsky and his department then began accepting comments from bitcoin users and businesses for a period of 90 days. One company, Circle, said that it would be forced to leave New York and stop servicing the state’s residents if the BitLicense regulations went into effect. Some theorized that the NYDFS intentionally made that first draft overly demanding so that the revision would seem more reasonable.
One notable change in this week’s new version is a reduction in the amount of time that businesses must keep records of their accounts and related information. The previous minimum was ten years, now it’s seven. The requirement was heavily criticized during the first comment period and this minor alleviation will probably not fully satisfy those who were upset. The revision also delineates exactly what should be included in those records.
The new draft also pegs the BitLicense application fee at $5,000. Its purpose is “to cover the cost of processing the application, reviewing application materials, and investigating the financial condition and responsibility, financial and business experience, and character and general fitness of the applicant.” Other fees may also be charged for related applications.
Another update stipulates that software developers and other non-financial businesses will not be required to obtain a BitLicense. In addition, any companies that do not fully qualify for the license may apply for a temporary version. This two-year, conditional permit will allow for further scrutiny from the NYDFS if the department deems necessary.
The revision was announced via Lawsky’s Twitter feed and has not yet been formally published. Once it becomes official, another comment period will begin. This time around, users and companies will have just 30 days to submit their thoughts.