New York

How Statists & Regulators Turned New York Into a Bitcoin Hell Hole

New York regulators have issued just two BitLicense permits in the 18 months since the regulations became law, it has been revealed — while rejecting four.

Also read: No Bitcoin Treasure Island yet as Iceland’s Pirate Party Falls Short

Patrick Murck: BitLicense ‘Put Industry Behind’

A Reuters request also revealed the BitLicense program has an application backlog of 15, with a lack of qualified staff blamed for the snail’s rate approval progress.

“By putting the regulations together and having key staff members leaving almost thereafter, they really put the industry behind the eight-ball in terms of competing with traditional service providers,” former Bitcoin Foundation executive director Patrick Murck told the publication.

The BitLicense project, which became notorious in cryptocurrency circles during its creation and release, was spearheaded by former Superintendent of the New York Department of Financial Services (NYDFS) Benjamin Lawsky.

Lawsky was vocal about needing comprehensive regulation of cryptocurrency businesses within the state of New York. This perspective drew heavy criticism from businesses and commentators.

However, when the preliminary BitLicense regulations became legally binding in June 2015, Lawsky abruptly left, along with several senior staff shortly afterwards.

Can New York’s Allure Shine Through Regulators and Bureaucracy?

Since then, it appears progress has all but ground to a halt, with critics noting other states will soon outwit New York in supporting progressive or disruptive technology businesses.

California, for example, dropped proposals for a similar BitLicense in August. This month, the state even permitted comprehensive merchant payment solutions for medicinal cannabis using cryptocurrency.

New York has become something of a dinosaur even at consumer level, with popular cryptocurrency services such as ShapeShift and Poloniex blocked in the region. Users are currently forced to go to New Jersey instead.

Meanwhile, support is again rallying against a proposed update to Bitlicense which would impose further requirements related to cybersecurity.

The addendum would “would require each covered entity to assess its specific risk profile and design a program that addresses its risks,” JD Supra reports, and would cover “any person operating under or required to operate under a license, registration, charter, certificate, permit, accreditation or similar authorization under the banking law, the insurance law or the financial services law.”

Another interesting development is this week’s announcement of former NYDFS advisor Dana Syracuse’s appointment to Blockchain advisor for lawyers Perkins Coie. Syracuse played a key development role during Bitlicense’s conception, but left NYDFS soon after.

Hope Not Lost?

However, not everyone is downbeat about the state of Bitcoin business in New York. Coin Center executive director Jerry Brito told Reuters the economic status quo will ensure the jurisdiction still gets its fair share of innovation.

“I think it’s going to be rare that companies say, ‘We’re not going to do business in New York,’” he said.

What do you think is the future for BitLicense in New York? Can regulators remedy the current situation? Let us know in the comments section below.


Cover image via Shutterstock 


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  • tricky

    bitcoin will be dead the second the criminal UN realise just how many nuclear power stations could be shut down without the power demands of various crypto currencies, i say enjoy it while you can, just expect bitcoin to be violently murdered at some point soon!!!

    • Jorj_X_McKie

      Tricky, that doesn’t make sense. Bitcoin would *never* be attacked by shutting off the power. And as cars increasingly are electric, there will be MORE nuke plants, not fewer. Even if the ‘UN’ made Bitcoin mining illegal, the network could pivot to PV systems with appropriate hashing reset. You can’t kill an *invention*.

      • tricky

        not very intelligent you are you, directory.io publicly lists all public keys with matching private keys, then there is the massive waste of electricity to sustain the networks, as for your electric cars do you honestly believe any petrol head would elect to migrate to electric power when we have petrol LOL the future does not include wasting electricity in sustaining blockchains or powering vehicles, nuclear is too dangerous and needs switching off, and you dont seem to understand how the real world works, get some education pal, people have back up power systems where the internet has minimal backup power, if the power goes down in more than 1 country miners continue mining and create alternative chains, sorry if you dont like the facts, must be another idiot who threw their life savings at a technology that was built to fail LOL dont be sore your not the only idiot on the planet 😛

        • Jorj_X_McKie

          That’s a load of knee-jerk name calling trolling.

          • tricky

            what your displaying is cognitive dissonance, its a crap stage but you might get past it if your lucky, facts dont care about opinions 😛

        • Ryan Herbison

          Not very intelligent you are, directory.io generates key pairs on demand, it doesn’t have a complete list, it would require most of the energy in the universe to create such a list, let alone to find your private key. The numbers involved in this are absolutely mind blowing. The existing banking system uses far more electricity than bitcoin/altcoin mining. For those that want to take a look at all of the other times bitcoin has died check out this, bitcon is dead, long live bitcoin! https://99bitcoins.com/bitcoinobituaries/

          • tricky

            lol you just demonstrated your lack of knowledge im afraid, every sible pair is there on demand it only needs a little sript to run testing every link and populating a database, hacking 101 mate ;P

        • Ryan Herbison

          http://directory.io/faq an actual explanation for directory.io

          • tricky

            try reading it, and applying some common sense if you have any, your involved in bitcoin which tells me your just another slave 🙁