Bitcoin Companies BitPay and Circle Comment on New York’s BitLicense Proposal

BitPay and Circle revealed their position on the BitLicense initiative with the comment period came to the end.

Photo: Egor Pavlovich/Coinspeaker

Photo: Egor Pavlovich/Coinspeaker

The comment period for ‘BitLicense’ proposal was closed on October 20th, with bitcoin companies BitPay and Circle provided their opinion over the initiative that was launched by the New York Department of Financial Services (NYDFS).

The first proposal was criticized by many bitcoin firms and until now many cryptocurrency businesses are still concerned what influence BitLicense could have on their companies.

Circle stated in its comments that the initiative will likely have a negative impact on its business and its customers.

Circle’s General Counsel and Chief Compliance Officer, John Beccia, said: “Circle believes there are numerous areas in the Proposed Rule, which could negatively impact consumers and business that wish to utilize digital currencies. There are several requirements that are so burdensome (and in some cases nearly impossible to comply with) that if the Proposed Rule were to be enacted in its current form, Circle would have no choice but to exclude New York residents from its service.”

According to Circle, the anti-money laundering (AML) provisions of BitLicense are not necessary. It also concerned about the applicability of new rules to bitcoin firms.

Circle considers that the NYDFS should collaborate with other regulators and make sure that its initiative complies with other rules.

The company said: “In particular, we believe the NYDFS should be working closely with the Conference of State Bank Supervisors (CSBS) and the Emerging Payments Task Force to develop uniform rules that do not only apply to digital currency firms, but all money transmitters.”

Meantime, BitPay pointed to four problematic points of BitLicense, calling it not innovative rule making that creates “unlevel playing field”.

The company’s Chief Compliance Officer, Tim Byun, commented: “In summary, given the significant prospects for Bitcoin the protocol and bitcoin the digital unit, BitPay respectfully requests that the NYDFS consider innovation itself in formulating regulations, establish risk-based rules that help to create jobs rather than eliminate them, leverage existing Anti-Money Laundering frameworks, and clarify that providers of ancillary activities do not require a BitLicense.”

BitPay think it is not necessary to collect ID data for each transaction, saying that Broadway traders do not collect such information for each transaction or 5th Avenue cash merchants do not ask people to give identification.

NYDFS superintendent Ben Lawsky has recently said bitcoin developers, miners and general users will not be subject to BitLicense regulations, except those who will be involved in regulated activities. Such activities include money transmitting, wallet hosting and exchange operations.

NYDFS projects to issue a new proposal, with a new comment period, which will allow more feedback from the bitcoin sector.

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