February 15, 2016
An unavoidable moment for FinTech has come with the New York BitLicense last year. What has been a dream for regulators for a while brought FinTech startups’ nightmares into reality.
Proposed in 2014, the New York Department of Financial Services (NYDFS) published its final BitLicense regulations for virtual currency businesses in June 2015. As the regulation was accepted, companies engaged in virtual currency business activity in New York are required to apply for a BitLicense. Since the regulation passed, companies had 45 days to apply for the license. Applicants for a license are required to have – among other things – AML, KYC, consumer protection and cybersecurity programs.
At the moment of proposal, back in 2014, the idea received a passionate commentary. Until now, it stays a controversial decision significantly affecting bitcoin businesses. It has been a long-standing dream of the regulators to take bitcoin under legal control and BitLicense is a great opportunity for a regulatory body to tame previously free bitcoin businesses.
However, there is another side to the coin. Any legal regulation for startups brings the burden of following certain requirements. The license itself is a burden as startups (often lean) have to pour financial and human resources into understanding and applying for a license. There is even an initiative called Stop the BitLicense.
Oppositions’ perspective to BitLicense
Let's look at Bit ...