You could still use your Bitcoins to buy things, but if you want to set up a virtual currency exchange in New York, you’ll have to be licensed by the state under a draft proposal for virtual currency regulations.
Superintendent of the New York Department of Financial Services Ben Lawsky has revealed a draft proposal for the regulations, which would be the first in the U.S.
The rules would require anyone conducting “virtual currency business activity” to have a BitLicense. The rules speak to buying and selling virtual currency as a customer business, storing virtual currency on behalf of others, or issuing a virtual currency.
The rules would not apply to merchants and customers who use virtual currencies for the transactions of goods and services.
To get the license, a company would have to disclose personal and financial information for top company officials, undergo a background check, pay a fee, and provide details about the company.
That seems to contradict one of the main draws of virtual currency, which is its anonymity.
?In developing this regulatory framework, we have sought to strike an appropriate balance that helps protect consumers and root out illegal activity—without stifling beneficial innovation,” Lawsky said in a post on Reddit’s r/bitcoin forum. ?These regulations include provisions to help safeguard customer assets, protect against cyber hacking, and prevent the abuse of virtual currencies for illegal activity, such as money laundering.”
Firms would also have to meet financial requirements similar to what is required of any financial institution, including having cash assets to protect the company from folding during a sudden downturn of the virtual currency markets.
?We recognize that not everyone in the virtual currency community will be pleased about the prospect of a new regulatory framework,” he added. ?Ultimately, though, we believe that setting up common sense rules of the road is vital to the long-term future of the virtual currency industry, as well as the safety and soundness of customer assets. (We think the situation at Mt. Gox, for example, made that very clear.) Moreover, given that states have specific regulatory responsibilities in this area, we also have a legal obligation to move forward on this framework.”
The draft regulations have been published in the New York State Register and a 45-day public comment period has begun. Regulators will then review the comments and finalize the regulations.
