BitLicense, long-awaited by some and dreaded by others, has been finally launched. Bitcoin companies that provide services to New Yorkers, have now only forty four days to become compliant and to apply for a BitLicense.
On 24 June, the New York State register officially published the final ‘Regulation of the Conduct of Virtual Currency Businesses’. It means that to operate legally, all the companies that supply digital currency services to the residents of the State of New York must apply for a licence before 8 August. The application form is available on the NYDFS website (the New York Department of Financial Services).
Bitcoin companies have now to follow strict KYC/AML rules and pay an application fee of $5,000. If the licence is refused, the company must cease its operations in New York immediately.
The first draft of the law was published in the summer of 2014 and shocked the bitcoin community. The Chamber of Digital Commerce was created to defend the interests of the bitcoin industry. After a long and heated debate, the key person behind the law project, Superintendent Benjamin Lawsky and his colleagues developed a second version of BitLicense. It was published in January of 2015 and caused a new wave of furious comments from the bitcoin community.
The final version of the law, unveiled on 3 June, addressed some of the most controversial issues. For instance, it does not require a duplicate set of documents from those who apply both to BitLicense and a money transmitter licence. Lawsky told CoinFox that comments from Brian Forde, Jeremy Allaire and other leaders of bitcoin industry were used to prepare the final version. However, NYFDS did not respond to the petition signed by a great number of cryptocurrency companies that asked to ‘provide a safe harbor’ freeing small bitcoin startups and those who create bitcoin 2.0 applications from the regulation burden.
In his speech dedicated to the final version of BitLicense, Lawsky said: “We recognize that we are not going to please everyone”. And that seems to be the case.
ShapeShift, a digital currency exchange, decided to stop its operations in New York in protest against the potential implementation of BitLicense 3.0. “We either would have to do something we're not comfortable with or leave New York. It's a moral and ethical stand we're going take.”
Already in April Robert Kuhne from the Chinese bitcoin exchange Huobi characterized BitLicense as “an example of an oppressive regulatory regime that will stifle innovation and ensure that New York does not become a major bitcoin center”.
Ironically, while many bitcoin enthusiasts see Lawsky as an arch-enemy, symbol of government intrusion in the free world of bitcoin, he plans to open a digital currency consulting firm when he steps down as a Superintendent of NYFDS.
It is expected that many other states of the U.S. might adopt similar documents to regulate bitcoin.