Bitcoin Forum

http://www.marketwatch.com/story/ny-regulator-considers-bitcoin-regulation-license-2013-11-14?dist=countdown

Full Article:

By Saumya Vaishampayan
NEW YORK (MarketWatch) -- The New York State Department of Financial Services said Thursday it will hold a public hearing on the regulation of virtual currencies like bitcoin in the coming months. The hearing will focus on the connection between money-transmission regulations and virtual currencies, as well as consider a specific license for virtual currencies, the regulator said in a notice of intent. The possible BitLicense would have anti-money laundering and consumer protection requirements, and the hearing could address how and when such a license would be issued. The move comes after the regulator in August issued several subpoenas to bitcoin companies and said it would examine regulation of virtual currencies. "Virtual currencies may have a number of legitimate commercial purposes, including the facilitation of financial transactions," Benjamin Lawsky, superintendent of financial services, said in the notice. "That said, NYDFS also believes that it is in the long-term interest of the virtual currency industry to put in place appropriate guardrails that protect consumers, root out illegal activity, and safeguard our national security."

Ahahah, now we will need license to run a software?

Cue Bitcoin's exodus from New York State.

Yeah, it's going to suck for people in New York.


This is disingenuous. It seems to me that the virtual currency industry is able to decide what is in its best interest. It doesn't need some regulators to tell it. The truth is that the NYDFS believes that it is in their best interest ...

I recommend the people to leave, too  :D

Situation is like trying to block with your finger hole in the dam  :D

He's specifically invoked the spook clause (not the first time either), it will only go downhill from here. Secret courts, sham trials, water-boarding miners, who know where that rabbit hole will lead?

Rendering cryptocurrency terrorists to black prison sites in Djibouti.

We are chuckling from Euroland.  But seriously Mehrica sort this out because the same will happen to us if you let this happen.

A friend of mine had this incredible insight:

If the NYDFS truly believes that their regulation is in the best interest of the virtual currency industry, then they should make a currency incorporating their regulations. If it is truly in our best interest, then everyone will adopt it!

To take something that already works well and say they can improve it by placing external controls is certain to fail because nobody will adopt their "improvements".

I've heard that FBI's CavitySearchCoin and the IRS' AnalProbeCoin are in the works...I can see them taking over from Bitcoin shortly.

wow... I know that Bitcoin is free, but man the way this particular article intends to modify Bitcoin is hilarious.

I can imagine this in a different scenario.

"wow, this thing is amazing, it regulates itself, even allows people to use it as they like."
"hmmm,.... this won't do, how do we get people to do as we say and not as we do?"
"I know! well monitor the people monitoring the monitor! just threaten them to use it as we want them to."
"Even better! lets tell them they need a licence to use it and make it impossible to get, lol!"

What they really want to do is have easy entry points into the network. So when you buy coins, the address the coins are sent to are put in a database that can be easily searched and analyzed. So if somewhere down the line they link an address to a criminal organization they can (with some luck) trace the coins back to one of these "entry points" that has an identity attached to it. What I am afraid of is them then saying only addresses registered with us are valid for US transactions and it is illegal to accept bitcoin from a non registered address. But then again, who knows how this will turn out.

And this is the moment when all supporters of bitcoin should contact this regulator flooding them with emails and mails saying NO to this nonsense.

Well the u.s.a will be the new 3rd word I gues...
Regulating bitcoin is as http://www.youtube.com/watch?v=tR4e8zwnR6w
The blackhole will solve over regulation fast :)

They sure are trying to drive out all entrepreneurs as fast as possible, the collectivist slavemasters there absolutely cannot stand any hint of self-determination or privately-owned property within their tax farm.  Bitcoin is just one example among several:


http://www.washingtonpost.com/blogs/the-switch/wp/2013/11/15/heres-why-airbnb-isnt-worried-about-new-york-citys-crackdown/

Well, the so called conspiracy theorists are proving to have called it correctly, next thing you know Obama and Biden will be metamorphosing into reptilians with cloven hooves  :D.

It turns out that we really are treading on the toes of the biggest, longest enduring and possibly the most ruthless cartel in recent history. They're pretty pissed off about this, don't think you can make any mistake about it. The only really weakness of Bitcoin that can be easily exploited is the public transcation information in the blockchain, but there is more than one way to evolve around the problem.

We can mitigate for it with the various transaction obscuration tools (CoinJoin, CoinSwap, eventually CoinWitness), and there are other new advances in cryptography that can actually prevent this happening at all, by making the system totally anonymous (ZeroCoin being an imperfect attempt, there will be more).

In the end, the monetary paradigm has shifted, and short of turning the entire world into a totalitarian dictatorship or a dystopic warzone, there's nothing that the old currency cartels can do. Apart from wave goodbye, graciously. Bye-bye!

A state can make any law , but if you cant enforce them who CARES!!!

So, are they planning to make a license for USING digital currencies...
or for running an exchange or similar service DEALING IN digital currencies.

If its the first, I'll be flabbergasted at their stupidity.
If its the second, I'll actually be pretty happy. Currently, exchangers need a money transmitter license. A more specialized license could potentially actually help Bitcoin.

Agreed, we do have network consensus for a reason.

If they are thinking of making it easier that would be great... but only time will tell, and how would they do that anyway?
Can they Bypass federal regulations?

If New York State creates a BitLicense it would only be applicable to business that server New York State citizens.  The business would still have to be registered with FinCEN and comply with all Anti-Money Laundering (AML), Know Your Customer(KYC) and Customer Identification Programs (CIP).   

thanks for this clarification. but it is only a Hearing and no legal steps will be taken.
Legal steps take a  Long time to be taken and finally executed.

New York State Department Of Finances is a Regulator.  They make rules and regulation based on the existing law.

New York State Banking Law
http://goo.gl/KF4R8n

If, based on the hearings, the Regulator decides to issue additional "guidance" as FinCEN did, or new regulations it could go into effect in 60 to 90 days.

They seem to be acting on this pretty quickly.  He issued the notice in November.  The hearings are in January.  I'd expect to hear of:
1. new guidance or
2. news of additional hearings

by June.

the link is not working
but anyway those regulations are State Regulation and not federal regulations , right ?
What kind of regs do you expect ?
 I suppose  Kind of tax-regs.

Interesting to note that since this was published, bitcoin uptake has been higher in New York state than pretty much anywhere else. If you use coinmap.org as a rough guide, at least.

State Regulators are usually concerned with Safety and Soundness and consumer protection.

Currently to operate as an "issuer" (miner) or an "exchanger" as a business in New York State you are required to have a net worth of over $1 million USD, you have to post a bond of $500,000.00 and a dollar for dollar capital requirement for any consumer funds you have at risk.

NY State seemed to suggest that they are looking to lower these requirement for virtual currrecy start ups that are operating under smaller volumes.

I don't believe they will be discussing taxes but that is also a concern.

Look for the IRS to rule on Taxes by this summer as well.

The GAO and The National Taxpayer advocate have both requested guidance from the IRS.

MSP #24
http://www.taxpayeradvocate.irs.gov/userfiles/file/2013-Annual-Report-to-Congress-Executive-Summary.pdf

http://www.gao.gov/assets/660/654620.pdf

Here is a short video interview with the guy from the GAO
http://video.pbs.org/viralplayer/2365095653

 ... because the NY financial regulators have done such a stellar job with the criminals infesting Wall St.  ::)

... keep smoking that delusion pipe, it seems to be working for you.

since I am german I have to thank you for your Explanation. But what is IRS exactly,please

Internal Revenue Service (IRS)  United States Federal Tax Authority.  They have not yet ruled on taxation of bitcoin.

Many of US States have taxes for State programs.  The IRS is the tax authority for the nation.  So a US Citizen may pay taxes to local authority, a State Authority and a Federal Authority.

Oh and here we go with the strict regulators of newyork. I think they wouldn't be able to stop it of course but they might make it illegal to just send btc's without a licence. I think we should wait and see.

No, now they realise they can't stop it they want to do the next best thing, take a cut. The elite ticket clippers always use 'licenses' to get their skim up front.

Thanks again,
it reminds me of Taxation in Switzerland:just the same 3 Authorities
local (Gemeinde/Stadt),state(e.g.Graubuenden/Engadin) and Bund