New Bill Proposed by New York Legislator Seeks to Get Rid of BitLicense

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by Bhushan Akolkar · 3 min read
New Bill Proposed by New York Legislator Seeks to Get Rid of BitLicense
Photo: Ron Kim

The new bill proposed by New York legislator seeks to foster a healthy environment for crypto businesses by relaxing the existing BitLicense process, without compromising on investor safety.

It looks like the State of New York is preparing itself for turning into a more friendlier place for crypto investors and entrepreneurs as the new bill proposed by New York State Assembly legislator Ron Kim (D-40) intends to get rid of the bureaucratic burdens levied on digital currency-related businesses.

The new bill takes a direct aim to replace “BitLicense” which is now viewed as the most maligned regime imposed on crypto startups operating in the New York. Kim discussed the issues with BitLicense with several blockchain industry experts after which he presented the legislation on March 13, 2018.

Under The New York Cryptocurrency Exchange Act, the Assembly Bill A09899 talks about a new mechanism that will replace the existing licensing regime and will be based on independent audits thereby making it sure that the investor’s interests remain protected.

While talking to CoinDesk, Kim said that the new bill will look to clear the path of startups by getting rid of the controversial components of the law while preserving the essential ones that help to protect investors. Kim said: “It would get rid of the fee and the actual license itself. We want to embrace the startup companies that are trying to launch exchanges.”

However, the addition of section-9x will make it compulsory for crypto businesses and entities to be subject to routine audits by any public or third-party depository service. These audits would ensure that businesses properly safeguard digital assets without compromising on investors security. The businesses should ensure adequate insurance for account holder assets and produce the proof-of-asset ownership.

Kim believes that such a change would be surely welcomed by the startup community, especially the ones who have struggled with the BitLicense in the past. Till now, only a few handful companies have been successful in getting BitLicense since 2015.

In a word to Bitcoin Magazine, Kim said: “What New York needs now are common-sense laws and security procedures to provide a degree of clarity for both businesses and the public. This legislation will give consumers and companies the confidence needed for widespread adoption of cryptocurrency in New York.”

Kim also expressed his disappointment over the thing that BitLicense has given too much power the New York State Department of Financial Services (NYDFS) and things were approved through a unilateral process. In a word to CoinDesk, Kim said: “As of now, one person, the superintendent from one state government agency, has way too much power over the current regulations, without any oversight, to determine which exchanges are allowed in the market.”

He further added “The BitLicense, and its [regulations], were created unilaterally through the executive office without any legislative authority. That’s not the way we should treat the tech sector.”

While expressing confidence in the new law, Kim said that the regular auditing process will ensure more transparency in the accounting records of cryptocurrency businesses, which are independently verified. He further added: “There’s a tremendous opportunity, as the financial capital of the world, to take a leadership role. There are so many people interested in getting involved, with cryptocurrency, for the right reasons that I envision a whole new revenue stream that would help the state of New York.”

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