New York Looks to Slap Digital Currency With Death Sentence

[commandrix]

If you want to do any kind of serious business anymore, you should stay out of New York no matter what they say about not paying taxes for ten years. That's the kind of thing states do when they're desperate and New York City is going to wind up being the next Detroit. I hear Virginia is all-around friendlier toward business.

[btckold24]

New York is such a joke - so far ahead but yet so far behind....

[ducatitalia]

Remember the pain and suffering we all experienced when China banned Bitcoin last year? Well, a new form of punishment is on the horizon for Bitcoin thanks to New York’s Superintendent of Financial Services, Benjamin Lawsky. This new artificially imposed homicide might as well be called – Death by Regulation.

Imagine walking up to a New York street vendor in Times Square to purchase a foot-long hot dog and being asked to provide your name and home address. If you’re paying with cash, no need to fret. But if you’re paying in Bitcoin or some other digital currency, be prepared to answer a series of questions before enjoying your tasty treat.

The State of New York is proposing BitLicense, a set of rules and regulations that would mandate licenses for merchants that accept Bitcoin and its digital cousins. The proposal creates expensive costs and barriers-of-entry for vendors, and infringes upon the rights of both businesses and casual users alike, according to a recent article published by the electronic frontier foundation.

The fact is, the World looks to New York for guidance as it relates to financial and banking regulation and if this proposed legislation passes, it would mean an end to Bitcoin in New York, and likely set a wrench into motion that could “gum up” the entire cryptocurrency machine. In essence, the Bitlicense would become the Ebola Virus of digital currency with Benjamin Lawsky becoming “patient zero”.

The open comment period on these regulations is expected to end soon, after which time, the Department of Financial Services will release an updated version of its proposed regulatory framework. That means that digital currency adopters worldwide have a limited amount of time to speak out against these new proposals or face regulation that is sure to strike a crippling blow to cryptocurrencies across the globe.

Full Story: http://altcoinpress.com/2014/10/new-york-looks-to-slap-digital-currency-with-death-sentence/

This should not in any way be considered unexpected (or even problematic for that matter)...New York is the fiat banking capital.  Over-regulation and monopolistic tactics are to be anticipated, and such draconian reactive efforts and concern on the part of established power structures could even be regarded as useful, by lending significant credibility and weight to the Bitcoin ecosystem.

At the end of the day, Bitcoin will succeed or fail based on its own merits, as determined by the global open-market.  Legislation, regulation, competition et al will have influence to varying degrees...but if BTC proves to be better than $ (or any other fiat) as determined by adoption and utility, then no manner of obstructionism will prevent proliferation.

Bitcoin is so much more than regulatable currency...it is the reimagination of economics...the reinvention of finance...the transition from centralized exploitation to individual empowerment.  

http://www.coindesk.com/block-chain-aid-fight-free-speech/
and
http://www.coindesk.com/imf-world-bank-bitcoin-block-chain-financial-inclusion/

[duke1839]

Don't let assholes like Lawsky claim the moral high ground.  Someone asked him if he, as a New Yorker, did business with an exchange in Slovenia, if the Slovenian exchange needed a Bitlicense.  His answer was yes.  I would have followed up with a scenario where a Slovenian exchange chooses to block New York IP addresses and then a New Yorker does business with them by masking his IP address.  In that case, who is liable for prosecution or sanctions?  The New Yorker masking his IP address or the company that unknowingly did business with a New Yorker?

If he says the New Yorker, then I would ask how he plans on protecting New Yorkers if he is planning on fining or prosecuting them for voluntarily exchanging fiat for bitcoin.  If he says the Slovenian exchange, then I point out that he is effectively requiring all Bitcoin businesses worldwide to get a Bitlicense just in case they unknowingly do business with New Yorkers. 

[Keyser Soze]

Article is very misleading, their hot dog cart example is not accurate.

(c) Exemption from licensing requirements. The following Persons are exempt from the licensing
requirements otherwise applicable under this Part:
(1) Persons that are chartered under the New York Banking Law to conduct exchange services and are
approved by the superintendent to engage in Virtual Currency Business Activity; and
(2) merchants and consumers that utilize Virtual Currency solely for the purchase or sale of goods or
services

[duke1839]

Article is very misleading, their hot dog cart example is not accurate.

(c) Exemption from licensing requirements. The following Persons are exempt from the licensing
requirements otherwise applicable under this Part:
(1) Persons that are chartered under the New York Banking Law to conduct exchange services and are
approved by the superintendent to engage in Virtual Currency Business Activity; and
(2) merchants and consumers that utilize Virtual Currency solely for the purchase or sale of goods or
services

Just listen to the man himself.  He says it is not our INTENTION to regulate software developers.
It is not our INTENTION to regulate miners.
It is not our INTENTION to regulate merchants.
It is not our INTENTION to regulate consumers.

Regardless of what his stated intentions are, these regulation may lead to all four of the above being required to get a Bitlicense. 

[Keyser Soze]

Article is very misleading, their hot dog cart example is not accurate.

(c) Exemption from licensing requirements. The following Persons are exempt from the licensing
requirements otherwise applicable under this Part:
(1) Persons that are chartered under the New York Banking Law to conduct exchange services and are
approved by the superintendent to engage in Virtual Currency Business Activity; and
(2) merchants and consumers that utilize Virtual Currency solely for the purchase or sale of goods or
services

Just listen to the man himself.  He says it is not our INTENTION to regulate software developers.
It is not our INTENTION to regulate miners.
It is not our INTENTION to regulate merchants.
It is not our INTENTION to regulate consumers.

Regardless of what his stated intentions are, these regulation may lead to all four of the above being required to get a Bitlicense. 

True, we do not know what the final regulations will say. As it stands now though, the hot dog cart example is completely inaccurate and the article as a whole is very misleading.

[runam0k]

Just listen to the man himself.  He says it is not our INTENTION to regulate software developers.
It is not our INTENTION to regulate miners.
It is not our INTENTION to regulate merchants.
It is not our INTENTION to regulate consumers.

Regardless of what his stated intentions are, these regulation may lead to all four of the above being required to get a Bitlicense. 

There's nothing wrong with expressing intentions and using the word "intention" FFS, it doesn't mean he's lying.  Given the laws of unintended consequences, use of the word "intention" here is absolutely correct.

Besides, courts can look at these statements as guidance in much the same way they can refer to records of parliamentary discussions (here in the UK, and whatever the equivalent is in the US) to determine, wait for it, the intention behind a particular piece of legislation or regulation, and construe that legislation or regulation accordingly.

Bitlicense is going to happen, we know that much.  If they go massively OTT, trying to regulate everything, and the Bitlicense is unreasonably burdensome, it will definitely be challenged in court.

[Cubic Earth]

Don't let assholes like Lawsky claim the moral high ground.  Someone asked him if he, as a New Yorker, did business with an exchange in Slovenia, if the Slovenian exchange needed a Bitlicense.  His answer was yes.  I would have followed up with a scenario where a Slovenian exchange chooses to block New York IP addresses and then a New Yorker does business with them by masking his IP address.  In that case, who is liable for prosecution or sanctions?  The New Yorker masking his IP address or the company that unknowingly did business with a New Yorker?

If he says the New Yorker, then I would ask how he plans on protecting New Yorkers if he is planning on fining or prosecuting them for voluntarily exchanging fiat for bitcoin.  If he says the Slovenian exchange, then I point out that he is effectively requiring all Bitcoin businesses worldwide to get a Bitlicense just in case they unknowingly do business with New Yorkers. 

There was a follow up question, and the guy asked Lawsky about a New Yorker using an ATM in London "Would the ATM operator have to have a BitLicense or prevent the New Yorker from using the machine?"  Lawsky said he didn't think so, that that was not the intent, meaning a New Yorker could use a BTC ATM in London with no restrictions.  Lawsky said they are trying to protect New Yorkers when they are in New York.

But I agree with your question about masking of IPs.  What is the burden on the companies overseas?  It is actually pretty incredible that someone in some country in Africa that was operating an online bitcoin business would even be expected to know of something called "The State of New York", let alone know New York's laws.  However, if someone in Africa was engaged in active hacking, DoS, etc., well you had better do your legal homework first!

[nutildah]

Spot on analysis, MicroGuy.

One of the reasons why bitcoin was necessitated in the first place was the fact that Wall Street sucks so very, very hard. They are perhaps the biggest financial drain on the planet and have proven themselves to be completely untrustworthy over the past decade.

Any regulations that come out of NY will be 100% written by the banking industry, make no mistake about it. They will be written by and for the 0.01%, with the intention of regulating the utility right out of cryptocurrency.

Banking regulations and bitcoin just don't mix, they are like oil and water.

[jonald_fyookball]

are we really surprised?  NYC was the town who tried to tell you how big of a soda you can have (now overturned)

[subcoin]

The fact is, the World looks to New York for guidance as it relates to financial and banking regulation

Yeah, no. World doesn't.
In fact, most of the world looks at US to see how NOT to do regulation...

[nutildah]

The fact is, the World looks to New York for guidance as it relates to financial and banking regulation

Yeah, no. World doesn't.
In fact, most of the world looks at US to see how NOT to do regulation...

Yes but most finance of the world is in the US, so you have no choice but to pay attention. For example, the total market cap of the NYSE and NASDAQ far supersedes that of every other stock exchange in the world put together. Its not even close.

If the US economy takes a hit, the world economy takes a hit.

This is why Wall Street banker, trader and fund manager types are commonly referred to as "the masters of the universe."

[Argwai96]

Imagine walking up to a New York street vendor in Times Square to purchase a foot-long hot dog and being asked to provide your name and home address. If you’re paying with cash, no need to fret. But if you’re paying in Bitcoin or some other digital currency, be prepared to answer a series of questions before enjoying your tasty treat.

This is not true. I would consider this to be FUD.

The only reason you would need to provide identification when dealing in bitcoin is if you were exchanging your bitcoin for cash. If you are exchanging your bitcoin for hot dogs, hamburgers, clothing, Giants tickets, or a car, you would not need to present your identification (you might for a car, but this has nothing to do with the fact that you are paying in bitcoin).

The OP/author of the article is seriously misinformed about what the NY regulations are proposing. It is a shame that so many people are able to write "new articles" without doing their due dilligance

[Honeypot]

LOL

That is all.

[Honeypot]

The fact is, the World looks to New York for guidance as it relates to financial and banking regulation

Yeah, no. World doesn't.
In fact, most of the world looks at US to see how NOT to do regulation...

Yes but most finance of the world is in the US, so you have no choice but to pay attention. For example, the total market cap of the NYSE and NASDAQ far supersedes that of every other stock exchange in the world put together. Its not even close.

If the US economy takes a hit, the world economy takes a hit.

This is why Wall Street banker, trader and fund manager types are commonly referred to as "the masters of the universe."

Sometimes, it's interesting to see how ignorant some people are of reality. In their mind, they can move markets and is the center of the universe. NYC? Some fishing town...

[MilesJohan]

Imagine walking up to a New York street vendor in Times Square to purchase a foot-long hot dog and being asked to provide your name and home address. If you’re paying with cash, no need to fret. But if you’re paying in Bitcoin or some other digital currency, be prepared to answer a series of questions before enjoying your tasty treat.

This is not true. I would consider this to be FUD.

The only reason you would need to provide identification when dealing in bitcoin is if you were exchanging your bitcoin for cash. If you are exchanging your bitcoin for hot dogs, hamburgers, clothing, Giants tickets, or a car, you would not need to present your identification (you might for a car, but this has nothing to do with the fact that you are paying in bitcoin).

The OP/author of the article is seriously misinformed about what the NY regulations are proposing. It is a shame that so many people are able to write "new articles" without doing their due dilligance

This is true. I think that many people just see the word 'regulation' and automatically assume that it will be bad.

Although excessive regulations are always bad, I do not think the NY regulations are 100% negative. As they do have some positives like forcing exchanges to have 100% reserves.

[Honeypot]

Imagine walking up to a New York street vendor in Times Square to purchase a foot-long hot dog and being asked to provide your name and home address. If you’re paying with cash, no need to fret. But if you’re paying in Bitcoin or some other digital currency, be prepared to answer a series of questions before enjoying your tasty treat.

This is not true. I would consider this to be FUD.

The only reason you would need to provide identification when dealing in bitcoin is if you were exchanging your bitcoin for cash. If you are exchanging your bitcoin for hot dogs, hamburgers, clothing, Giants tickets, or a car, you would not need to present your identification (you might for a car, but this has nothing to do with the fact that you are paying in bitcoin).

The OP/author of the article is seriously misinformed about what the NY regulations are proposing. It is a shame that so many people are able to write "new articles" without doing their due dilligance

This is true. I think that many people just see the word 'regulation' and automatically assume that it will be bad.

Although excessive regulations are always bad, I do not think the NY regulations are 100% negative. As they do have some positives like forcing exchanges to have 100% reserves.

People have no idea how lack of regulation have been running down crypto. Vast majority of existing crypto 'heavy weights' have vested interest in demonizing regulations mainly because it would cut them off from doing their profiteering.

Exchanges have been running on hot air and lack of reserves for too long, and they will be swept aside.

[nutildah]

Sometimes, it's interesting to see how ignorant some people are of reality. In their mind, they can move markets and is the center of the universe. NYC? Some fishing town...

Yeah unless you consider gross domestic product, trading activity and the fact that it is the 12th biggest economy in the world.

I think you are underestimating the gravity of their pull. Weren't you around in 2008?

[nutildah]

People have no idea how lack of regulation have been running down crypto. Vast majority of existing crypto 'heavy weights' have vested interest in demonizing regulations mainly because it would cut them off from doing their profiteering.

The regulation is going to be written by Wall Street, which is a far more corrupt and world-destroying entity than crypto, because they operate under the pretense that they are good and necessary and aren't evil shits (which the vast majority are -- evil, spoiled, unnecessary shits, deadset on making the world a worse place to live in during their lifetimes).

Here, its just a freeforall with no pretense. To me thats the more honorable option.

Exchanges have been running on hot air and lack of reserves for too long, and they will be swept aside.

I have no idea if this is true or not but I hope for their sake its not.