New York lays down strict rules on Bitcoin operationsBy Justin Kahn
It looks as though New York is the first state to put the lock on Bitcoin operations. Recently announced details outlines the state's new regulatory rules towards businesses that deal in the cryptocurrency and operate out of New York. New York Superintendent of Financial Services Benjamin Lawsky has been working on the state's regulations for some time now and in a speech at a recent emerging payments event in Washington revealed the new BitLicense requirement.
During the recent speech, Lawsky said "We simply want to make sure that we put in place guardrails that protect consumers and root out illicit activity – without stifling beneficial innovation." Businesses won't need to reapply when they update their services, unless it explicitly changes functionality. BitLicenses also will not be required for company's that already have a regular money transmitter license.
Only company's that handle financial exchanges need apply for the license. Developers, retail outlets and others, won't need to go through the Department of Financial Services to deal in Bitcoins.
Lawsky believes the license will stop money laundering schemes and generally create a more legitimate cryptocurrency environment in the state. But as you are likely imagining, the Bitcoin community isn't happy about it, with some advocacy groups claiming it's actually a form of state-run money laundering in itself, considering New York banks aren't required to follow a similar set of guidelines. New York is the first, but it's easy to imagine other states across the US following suit.