BitLicense... who does it apply to exactly?

[fairglu]

Just reading the terms, it seems to apply to anyone dealing with virtual currencies...

Are there clear unambiguous exemptions?
Like for merchants or services that just accept bitcoin payments (but do not hold customer funds)?

 

[ashour]

Just reading the terms, it seems to apply to anyone dealing with virtual currencies...

Are there clear unambiguous exemptions?
Like for merchants or services that just accept bitcoin payments (but do not hold customer funds)?

 

All services and companies who operate in NY are affected, specifically those who transmit virtual currencies like for example bitfinex or Kraken.

[wmikrut]

Just reading the terms, it seems to apply to anyone dealing with virtual currencies...

Are there clear unambiguous exemptions?
Like for merchants or services that just accept bitcoin payments (but do not hold customer funds)?

 

All services and companies who operate in NY are affected, specifically those who transmit virtual currencies like for example bitfinex or Kraken.

So reading the documentation about Bitlicense... what does it mean for pool operators?

Even though I have a pool and BTC is not one of the coins that can be mined... does this mean I need to start turning away New York residents from accessing my pool?

[wmikrut]

I found my answer... and for anyone else who is interested too:

Developers, Miners and Bitcoin Users

Lawsky recently clarified one point that had many people concerned. According to Lawsky, the new regulations will only apply to companies that provide a financial service to customers. This answers a huge question that many had when the proposal was first introduced: what about Bitcoin miners? Mining pools send bitcoin to miners, so would mining pool operators need a BitLicense to do business with New York residents?

Apparently, mining pools, individual miners, software developers and normal Bitcoin users are free from regulations for now.

http://www.coinssource.com/bitlicense-update-developers-miners-comment-period/

[Bitco]

The BitLicense applies to institutions regulated by the New York Department of Financial Services, which are listed here:

http://www.dfs.ny.gov/about/whowesupervise.htm

[fairglu]

The BitLicense applies to institutions regulated by the New York Department of Financial Services, which are listed here:

http://www.dfs.ny.gov/about/whowesupervise.htm

The "Service Contract Providers" in that list can be understood in very broad terms when applied to virtual currencies... I definitely see it as able to cover pools or a variety of things.

http://www.coinssource.com/bitlicense-update-developers-miners-comment-period/

This was during the discussion, before the final version. I do not understand legalese much, but did not see it stated clearly in the final version what a financial institution is exactly, if all there is the list above, then this is murky waters to me (but again, I do not understand legalese much, hehe)

[wmikrut]

Understood.  I am going to have to question New York DFS and see if I can get a clear answer on this.

I would hate to 'exclude' a state because of fear -- which it seems some pools are already doing.

I'll post here any response I receive from NYDFS here.

[fairglu]

Understood.  I am going to have to question New York DFS and see if I can get a clear answer on this.

I would hate to 'exclude' a state because of fear -- which it seems some pools are already doing.

I'll post here any response I receive from NYDFS here.

Thanks!

About the fear, well, the level of potential annoyance is quite higher than the level of potential benefits. At $5000 for a single state, that's quite steep.

[wmikrut]

Well, I have to say maybe I shouldn't make 'fear' sound like a bad thing.
I am guilty of loading up tools to block NY residents from my pool when I started to think, does this really apply to us.

Either way, I am crafting an email to NYDFS now and hopefully we can get some clarification to what the VCRF means to pool operators.

[wmikrut]

Question away... let's see how long they take to respond, and if they actually understand what I am asking.

8/11/2015 - Day 1.  No response.  I did receive an acknowledgement the email had been received.
8/12/2015 - Day 2.  No response.
8/13/2015 - Day 3.  No response.
8/14/2015 - Day 4.  No response.
8/15/2015 - Day 5.  No response.
8/16/2015 - Day 6.  No response.
8/17/2015 - Day 7.  No response.
8/18/2015 - Day 8.  No response.  I resubmitted my question to NYDFS.  I did receive an acknowledgement the email had been received.
8/19/2015 - Day 9.  No response.
8/20/2015 - Day 10. No response.
8/21/2015 - Day 11. No response.
8/22/2015 - Day 12. No response.
8/23/2015 - Day 13. No response.
8/24/2015 - Day 14. No response.
8/25/2015 - Day 15. No response.
8/26/2015 - Day 16. No response.
8/27/2015 - Day 17. No response.  I will resubmit my question for the third time tomorrow.
8/28/2015 - 09/07/2015 - No Response.
9/08/2015 - Day 28. Finally I received the following response "Your questions have been forwarded to the appropriate unit at VCLicenseQuestions@dfs.ny.gov"
9/09/2015 - Day 29. Still waiting from a response from VCLicenseQuestions@dfs.ny.gov
9/09/2015 - Day 30. Still waiting from a response from VCLicenseQuestions@dfs.ny.gov
9/10/2015 - Day 31. Still waiting from a response from VCLicenseQuestions@dfs.ny.gov
9/11/2015 - 09/17/2015.  Still waiting from a response from VCLicenseQuestions@dfs.ny.gov
10/25/2015 - Day 76.  Still waiting from a response from VCLicenseQuestions@dfs.ny.gov

I am afraid I will have no choice but to IP ban NY by geoIP.
However, I can prove I have been trying to contact them with no response... so that will be worth something.

After a week I will resubmit my question and I will keep doing so until I get some answer.

[fairglu]

Question away... let's see how long they take to respond, and if they actually understand what I am asking.

Should be interesting either way!

I am guilty of loading up tools to block NY residents from my pool when I started to think, does this really apply to us.

Hehe, I have not pulled the trigger yet, but I have been looking at the relevant geoip filters.

[wmikrut]

Hehe, I have not pulled the trigger yet, but I have been looking at the relevant geoip filters.

Lol..

Exactly what I started working on last night.
Was getting ready to implement it -- and decided to hold.

[Bitco]

The BitLicense applies to institutions regulated by the New York Department of Financial Services, which are listed here:

http://www.dfs.ny.gov/about/whowesupervise.htm

The "Service Contract Providers" in that list can be understood in very broad terms when applied to virtual currencies... I definitely see it as able to cover pools or a variety of things.

I doubt it, unless your pool is selling you an extended warranty on your mining hardware.

In New York, a service contract is a contract or agreement, for a separate or additional consideration and for a specific duration, to perform the repair, replacement or maintenance of any kind of property, or indemnification for the repair, replacement or maintenance of property, due to a defect in materials or workmanship or wear and tear. Although a service contract may cover any kind of property, some of the most common kinds of property covered by service contracts include motor vehicles, personal electronics, computers, home appliances and certain residential plumbing, heating, cooling, ventilation, and electrical system components.

[fairglu]

I doubt it, unless your pool is selling you an extended warranty on your mining hardware.

In an ideal world, yes, but I could see pools being pulled under that because of an implicit contract with their users, and given that pool operator perform maintenance of the pool server, are supposed to ensure safety of the cryptos not yet paid out (which are property), etc.

And a similar reasoning could be applied to all kinds of crypto-currency services where the payment is in bitcoin.
For instance if a server hosting service were to accept bitcoin, would it mean the hosting service has to get a BitLicense to operate? (on top of everything else).
Does it mean that a car mechanic would have to get a BitLicense to be able to accept Bitcoin in New York? etc.

Whether such interpretations would hold in court is immaterial given that the costs of legal defense are prohibitive, even if I personally do not think it would, a clarification from the NY DFS would be preferable to waiting for the case to have been tested in court.

[fairglu]

FWIW Genesis Mining have considered themselves at risk and exited NY, they provide pure mining contracts with no trading.

I guess it may be time to ip-ban NY...

[wmikrut]

I do have to say, I am a disappointed in NYDFS's lack of response so far.

For a state so ready to take on a fast paced emerging technology for regulation... they need some serious rethinking of their ability to respond to basic questions.

[lottery248]

i am totally disappointed with the bit license, and it should not to be here, at all.
forcing people to pay taxes, and forcing people to pay such a large capital for the fee. basically bit license is kicking out bitcoin in order to let the arbitrary to take over.
at least i live in Hong Kong, won't be affected. USA is garbage of the economic freedom, well, to be a full-of liberty countries, we should have the economic freedom enough.

[harrymmmm]

Regulatory overreach, but ...

It might be an incentive for decentralization if it did apply to pools (but not individual miners as Lawsky promised).

[ashour]

Just reading the terms, it seems to apply to anyone dealing with virtual currencies...

Are there clear unambiguous exemptions?
Like for merchants or services that just accept bitcoin payments (but do not hold customer funds)?

 

All services and companies who operate in NY are affected, specifically those who transmit virtual currencies like for example bitfinex or Kraken.

So reading the documentation about Bitlicense... what does it mean for pool operators?

Even though I have a pool and BTC is not one of the coins that can be mined... does this mean I need to start turning away New York residents from accessing my pool?

Well if you allow user to transmit virtual currencies and then yes your mining pool would probably need a bit license for NY. You should contact someone who is more educated in this whole bit license  regulation.

[harrymmmm]

do we have a straightforward answer about whether a plain old merchant in NY accepting bitcoin for his goods and services needs a bitlicense?