New York bitcoin regulatory proposals frighten entrepreneurs

According to foreign media reports, the State of New York announced a few days ago the regulation of bitcoin and other virtual currencies, the analysis said that at first glance, those provisions seem to be for the 19th century banking industry to develop, rather than against the rapidly changing virtual currency industry.

The proposal states that companies that want to do business in New York State, buy, sell, store or redeem virtual currency must apply for a permit.

Benjamin Lawsky, who is in charge of making those rules, needs to be fine-tuned. After all, Bitcoin was developed as a tool for engaging in illegal activities. Now, a new generation of bitcoin startups has grown with hundreds of millions of dollars in venture funding. New York wants to expel them as soon as possible? Probably. New reporting requirements in New York include new reporting rules that apply to all types of companies, even more stringent than current federal rules.

According to the proposal, bitcoin companies not only need to track the physical addresses of their clients, but also the physical addresses of those who use Bitcoin networks to transfer money to their clients. This will weaken the basic value of bitcoin. Moreover, bitcoin companies also need to report frequently to the New York State Department of Financial Services (DFS), where Lotski's agency is located, detailing changes in ownership, financial projections or even strategic business plans.

If these rules are implemented, the days of bitcoin start-ups will inevitably be very sad, after all, they have limited resources and are struggling to find new businesses. "I'm worried about reporting too often and in too much detail, and it's really overkill, especially for the new industry." Jean-Jacques Cabou, partner at law firm Perkins Coie and advisor to bitcoin company Jean- Pointed out.

In some cases, the bitcoin company needs to report more than other industry companies licensed by the DFS. For example, they must retain 10 years of customer complaint information. "You know, even street shops doing money trading do not have to keep 10 years of customer complaint information." Kabbah said, "That's a big demand for the new industry, and I think the related companies will be very unpleasant."

Another big problem is that those rules apply to new bitcoin companies that are not currently subject to federal regulation. They include online wallet companies like Blockchain, BitGo and may even include Bitcoin tip apps. That is "ridiculous," according to Patrick Muck, general counsel for the Bitcoin Foundation. "The proposal is tantamount to narrowing the entire Bitcoin industry from the perspective of its application," he said. "The proposal turns New York State into a quasi-federal regulator for the entire Bitcoin industry."

DFS has not yet responded to a press comment, but the agency is clearly ready to talk bitterly to the bitcoin community. Lusky today announced the proposal on the popular online community Reddit. On Reddit, the proposal is obviously not to be seen.

Bitcoin company investor Roger Ver believes that if adopted, the proposal is bound to drive the Bitcoin company out of New York. "These self-proclaimed governments are not demanding what they do, but demanding that we disregard us if we do not obey them." He said, "And Bitcoin came exactly to deprive people of what they thought they had the power to rule The power of the arrogant generation. "

Translator: Le Bang

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