November 4

Bitcoin: NYDFS plans temporary BitLicense for crypto trader

LawskyThe New York Department of Financial Services (NYDFS) has announced that it is actively considering a temporary and customized BitLicense for Bitcoin startups and small businesses.

The specific licensing would allow Bitcoin startups to operate within a slightly more flexible legal framework for an unspecified period of time and to have their corporate structure reviewed.

Expected transaction and business volume for the crypto trader

The formal announcement of the NYDFS strategy for crypto trader change came from superintendent M. Lawsky during his keynote address at the opening of the five-day Money 20/20 conference. The crypto trader conference will be attended by Bitcoin’s big names such as Cameron and Tyler Winklevoss, Circle CEO Jeremy Allaire, and Blockchain CEO Nicolas Cary.

With prepared comments, Lawsky explained his department’s decision and clearly explained how the NYDFS responded to criticism from Bitcoin Communiy during the 90-day comment period.

Lawsky said: “A problem we’ve heard almost throughout the comment period is the cost of compliance compliance for new companies in the virtual currency industry… There has to be a way for startups to start doing business, or to be directly crushed by compliance costs.” Lawsky said.

In addition, Lawsky spoke of a possible small group of special auditors who will supervise such start-ups and examine their applications. They will then help companies to find their way through the jungle of regulations.

Determining factors

Lawsky introduced some factors that have an impact on the temporary BitLicense:
Existing risk reductions through bonds or insurance policies
The nature and focus of the company
Whether the company is already registered with FinCEN as a money service company
According to Lawsky, the latest draft of the NYDFS is characterized by the feedback received from the Bitcoin community. He also hopes that the letters from the community will be published soon.
Lawsky hopes that the NYDFS will strike a healthy balance between customer protection and the continued growth of the Bitcoin industry.
“We hope that many new and innovative companies willing to do the right thing will do a lot of business in New York, the financial capital of the world.

Consumer engagement
In the course of the speech, Lawsky repeatedly pointed out that, in addition to relieving Bitcoin startups, the protection of customers from illegal activities is still a priority.

“We cannot turn our backs on the vital task of preventing money laundering, which sometimes makes indescribable crimes possible,” Lawsky said.

Lawsky also said that startups must expect severe penalties for misconduct and that all companies subject to BitLicense must meet strict anti-money laundering (AML) and capital standards. For startups, however, there is also the possibility to outsource these risks:

“We had the same problem with smaller banks in the financial sector. We quickly noticed that if a company consists of 12 employees and 9 of them are compliance officers, that is not a healthy business model”.

Lawsky concluded by saying that the latest version of BitLicense will soon be released for revision and that the final version will probably be released in January.