The proposed NYDFS BitLicense could impact on non-US business:
Section 200.2 Definitions
(g) New York Resident means any Person that resides, is located, has a place of business, or is conducting business in New York
(n) Virtual Currency Business Activity means the conduct of any one of the following types of activities involving New York or a New York Resident
Section 200.3 License
(a) License required. No Person shall, without a license obtained from the superintendent as provided in this Part, engage in any Virtual Currency Business Activity
The jointly analysis of these rules can impact on non-US business. The Bitcoin ecosystem consists in high pseudoanonimity and interpreting in letteral way, every business that involves NY residents, even if run abroad with no contact with NY State, requires BitLicense or find a way to avoid NY residents.
For exemple: an european exchanger could block all New York’s IP addresses, but how can exclude a New York Resident that is located temporary in another State or Country, or using an anonymizer?
It will be enough a declaration that the user is not a NY Resident as for 200.2(g)?
Another problem is for travellers that will not have access to their accounts when located in NY.
Last question: is this proposed regulation compliant with International Agreement signed by US?
Reblogged this on GreenAddress and commented:
Couldn’t agree more with Capaccioli.
The regulation is not removing uncertainty from the market, it is instead increasing it. The broad and all inclusive language used, at least at first sight, is incompatible with Bitcoin’s pseudo-anonymous and distributed nature.
BitLicence as-is does not protect consumers, but stifles innovation with unnecessary and costly burdens. Bitcoin is different from the rest of the financial system and requires some careful thought before regulations are put into place.
Finding the right boundaries and the right balance is a difficult task that requires meticulous and conservative attention.
Two comments:
1. For the benefit of virtual currency businesses that strive to avoid doing business in New York, I published a sample disclaimer at http://hack-igations.blogspot.com/2014/07/bitlicens.html . The disclaimer might help a non-New York business make clear that it was not doing anything that could be regulated under the words of the draft BitLicense regulation.
2. As lawmakers consider the need for regulating cryptocurrency, they should observe the experience of another new e-commerce phenomenon: crowdfunding. Despite its wide popularity, crowdfunding has been relatively free of fraud. A key reason is that the “crowd” spots any attempts at fraud and then warns people away from it. http://crowd-law.blogspot.com/2014/05/lawsuit-by-state-attorney-general.html Query whether the communities around crypto-currencies have developed or will develop similar anti-fraud behavior.
[As stated at the blogs above, the foregoing is not legal advice for anyone. Use at your own risk. If you need legal advice, you should explicitly retain a lawyer.]
The real problem that I see is that if a NY resident (as defined in 200.2 and consequently even an Italian temporary located in New York) uses this kind of services, the services providers is subject to bit license?