More than 70 digital currency industry businesses, executives and advocates are backing a petition that calls for the easing or eradication of allegedly onerous components of New York’s BitLicense proposal.
Submitted as part of a recently closed public comment period, the measure has so far garnered support from companies such as Coinbase, Blockstream, BitPay, Circle and Ripple Labs, as well as notable developers and venture capitalists.
Overall, the petition seeks to convey the argument that it is “unreasonable” for the New York State Department of Financial Services (NYDFS) to apply its provisions equally across the industry, arguing that creators of open-source protocols, micropayments providers, security intermediaries and smaller entrepreneurs should be excluded from certain coverage.
Stark told CoinDesk:
“The goal here was to bring a substantial part of the community to one proposal as opposed to different proposals so that there’s strength in numbers.”
Stark and Wright were inspired to put together the proposal due to what Stark called their shared interest in Internet history and the belief that safe harbor policies such as this played an instrumental role in helping move the development of this technology forward.
The petition further included definitions for startups in each of its four proposed coverage areas, defining small startups as those that have been in operation for less than two years.
A longer version of the submitted document, stretching 15 to 20 pages, is currently being developed, Stark added.
Overall, the paper is openly critical of what its authors called the high costs of compliance that the current iteration of the BitLicense would impose on these classes of startups, though it sought to frame its solution as “a natural extension” of the regulation’s goals.
For example, the authors are keen to stress what they consider to be the untapped potential of bitcoin and blockchain technologies to lead to solutions that will solve challenges for society, while providing economic benefits to New York.
“If allowed to flourish, this technology can provide compelling solutions for the 93 million Americans that are un- or underbanked, enable workers abroad to send remittances home without hefty fees, eliminate the substantial public policy challenge of continual data breaches where citizens’ personally identifiable information is compromised, and bring jobs to the state of New York,” the petition reads.
During the safe harbor period, the authors stress that startups should still be required to follow security best practices, while complying with regulations put forth by the Financial Crimes Enforcement Network (FinCEN).
In an interview, Stark built on this idea, suggesting that fees for state-by-state licenses for any kind of licensure, be it a full license or a proposed transitional license, would be enough to prevent many startups from launching.
Signatories of the petition seemed similarly galvanized around the idea that bitcoin startups, even those in nascent stages, would currently need to pay for the license and its related compliance requirements.
Melanie Shapiro, CEO of multisig hardware wallet provider CryptoLabs, put forth such an opinion, telling CoinDesk:
“I believe in a 24-month window that will give early-stage startups the opportunity to grow without the hinderance of filing for, and paying for a BitLicense.”
Brandon Goldman, co-founder of stealth FinTech startup FreshPay, emphasized this point, suggesting that any path forward for bitcoin startups should be “clear and reasonable”.
Tom Mornini, founder of API developer Subledger, went a step further by arguing that the current BitLicense will harm community development, and by extension, force innovators to relocate abroad.
“As a serial entrepreneur, I knew that this would be bad for New York, possibly bad for the US, bad for cryptocurrency and horrible for entrepreneurs,” he said.
- ^ the measure (docs.google.com)
- ^ Coinbase (www.coindesk.com)
- ^ Blockstream (www.coindesk.com)
- ^ BitPay (www.coindesk.com)
- ^ Circle (www.coindesk.com)
- ^ Ripple Labs (www.coindesk.com)
- ^ Aaron Wright (coincenter.org)
- ^ Elizabeth Stark (www.law.yale.edu)
- ^ Man writing image (www.shutterstock.com)
- ^ Ben Lawsky (www.coindesk.com)
- ^ BitLicense (www.coindesk.com)
- ^ NYDFS (www.coindesk.com)
- ^ Regulation (www.coindesk.com)