More Comments Invited for Proposed Bitcoin Rules
by Sydney Ember
New York’s Department of Financial Services said last year that it would extend by 45 days the comment period for its proposed virtual currency regulations. Those interested in submitting comments on the new rules will now have until Oct. 21, 2014.
The move comes after a number of prominent Bitcoin supporters requested additional time to comment on the draft rules, which is intended for virtual currency companies operating in New York and includes rules on consumer protection, the prevention of money laundering and cybersecurity. A “BitLicense” would be required for Bitcoin exchanges and for companies that secure, store or maintain custody or control of virtual currency on behalf of their customers.
“It’s obvious that this is a novel regulation,” Benjamin M. Lawsky, the superintendent of financial services, said in an interview on Thursday. “It’s really the collision of banking regulations with new technology, and we want to make sure we get it right.” Should Mr. Lawsky’s office make significant changes to the proposal after the comment period, they will go out for further review.
Since the proposed regulations were introduced, Bitcoin supporters have had a mixed reaction on whether the rules will help legitimize digital money or stanch innovation and threaten the freedom Bitcoin was intended to foster. Many in the Bitcoin industry expressed concern that the original 45 days allotted for comments would not allow for enough time to fully digest the proposals. Start-ups in particular said they simply did not have enough resources to comply with regulations that seem to favor more established financial institutions.
Mr. Lawsky said his office had received thousands of comments on the issue. Soon after the draft rules were made public, a group of about 400 virtual currency supporters sent a letter to Mr. Lawsky asking for a 45-day extension of the comment period. The Bitcoin Foundation sent a similar letter in the first week of August requesting up to six more months to provide feedback. Supporters have also asked that the comment process be more iterative and that Mr. Lawsky hold a public hearing to discuss the proposals.
On Wednesday, the three biggest Bitcoin exchanges in China, BTC China, OKCoin, and Huobi, sent comments to Mr. Lawsky addressing the proposed rules. Among other issues, the exchanges said that the BitLicense framework should only cover virtual currency companies with “meaningful” connections to New York.
As written, the proposed regulation is overly broad in its application outside the United States, imposes a disproportionate compliance burden on virtual currency businesses and misapplies normal compliance procedures,” they said in a release.
[Note: It’s back! A little recent history on Bitcoin, only one of many budding international alternative “internet currencies”, might put it into perspective:
-- Bitcoin Weekly 2014 May 7: First political party to use blockchain for e-voting is from Denmark, The Rise of Digital Currency, Bitcoin’s niche in developing economies, at: https://siliconangle.com/blog/2014/05/07/bitcoin-weekly-2014-may-7-first-political-party-to-use-blockchain-for-e-voting-is-from-denmark-the-rise-of-digital-currency-bitcoins-niche-in-developing-economies/
-- The Face Behind Bitcoin, at: https://mag.newsweek.com/2014/03/14/bitcoin-satoshi-nakamoto.html
-- Mt. Gox Halts All Transactions in New Bitcoin Setback; Brief Statement Replaces Exchange's Usual Website, at: https://online.wsj.com/news/articles/SB10001424052702304834704579404101502619422?mod=djemalertNEWS
-- Welcome to 21st-century Ponzi scheme: Bitcoin, at: https://nypost.com/2014/02/15/welcome-to-21st-century-ponzi-scheme-bitcoin/
-- Beware of this Insidious New Currency Scam, at:
https://www.wallstreetdaily.com/wallstreet-research/reports/bitcoins.html
-- The U.S. government's bitcoin bonanza: How, where and when to sell?, at: https://www.reuters.com/article/2014/01/18/us-usa-bitcoin-forfeiture-idUSBREA0G1K920140118
Connection with TRANSHUMANISM:
-- Transhumanism and the History of BitCoin, at:
https://hplusmagazine.com/2014/01/08/transhumanism-and-the-history-of-bitcoin/
-- Transhumanism and Money, at: https://ieet.org/index.php/IEET/more/kirsh20130306
-- (Bitcoin) Silicon Valley’s Elite Don’t Want to Secede. They Just Want to Stay on Top, at: https://www.wired.com/business/2013/12/balaji-srinivasan-joins-a16z/
-- Review: Singularity Rising by James D. Miller, at:
https://hplusmagazine.com/2014/01/16/review-singularity-rising-by-james-d-miller/
-- Institute for “Ethics” and Emerging Technologies (IEET):
Cryptocurrencies as a Single Pool of Wealth, at:
https://ieet.org/index.php/IEET/more/stolyarovII20140118
-- BBC - Singularity University plots hi-tech future for humans, Budapest Conference, at: https://www.bbc.co.uk/news/technology-25000753
-- Bitcoin: Black Market Bait or Shrewd Investment?, at:
https://www.fool.com/how-to-invest/broker/2013/12/29/bitcoin-black-market-bait-or-shrewd-investment.aspx; also, https://www.google.com/search?hl=en&gl=us&tbm=nws&authuser=0&q=bitcoin+heist&oq=%22Bitcoin&gs_l=news-cc.1.9.43j0l10j43i53.55847.58952.0.74928.8.8.0.0.0.0.63.406.8.8.0...0.0...1ac.w5P5GISH1KY#authuser=0&gl=us&hl=en&q=%22bitcoin%22+%22black+market%22&tbm=nws
Connection with FUTURISTS (who are transhumanists):
-- Kurzweil: Bitcoin attracts major investors, at: https://www.kurzweilai.net/bitcoin-attracts-major-investors
-- PARDON the DISRUPTION: The Future you NEVER Saw Coming, at:
-- Agricultural Futurist Jack Uldrich to Keynote Three Events in January; Foresight 2020, at: https://www.prweb.com/releases/2014/01/prweb11482597.htm
-- The Shape of the FUTURE: How to Help Tomorrow's Children Cope With a World of Accelerating Change
https://www.dailyfinance.com/2013/12/23/the-shape-of-the-future-how-to-help-tomorrows-chil/
The article first appeared here. -- DNI]