New York Department of Financial Services: Virtual Currency Regulations [pdf] | Hacker News Reader

New York Department of Financial Services: Virtual Currency Regulations [pdf]

dfs.ny.gov

22 pointsnadams18 comments

Very misleading title.

Exemption from licensing requirements. The following Persons are exempt from the licensing requirements otherwise applicable under this Part:

(1) Persons that are chartered under the New York Banking Law and are approved by the superintendent to engage in Virtual Currency Business Activity; and

(2) merchants and consumers that utilize Virtual Currency solely for the purchase or sale of goods or services or for investment purposes.

EDIT: Also its not a law but a regulation created by the NYS financial regulatory agency under existing state statutes.

Who does it apply to then?

Aside from exchanges and sites that hold other people's bitcoins that's a good question.

It seems like it all depends on how they interpret "for investment purposes". A broad interpretation would seem to cover most uses, such as trading on localbitcoins.com. However localbitcoins.com decided on its own to disallow use by NYS residents after this regulation came out.

So, if you mine bitcoins you need a license?

You could probably argue that falls under "for investment purposes".

So what does that leave? Do you need the licence to mine?

I believe Lawsky made statements to the effect that you do not. However I don't think there's anything in the regulation itself that explicitly addresses mining.

Sounds like this only applies to exchangers then, because #2 covers 99% of use cases.

Still, $5k license, jeez. What a ripoff.

We updated the title from “New York passes law requiring people to get $5k license to use Bitcoins”.

Thanks for the info. Also, why was it bumped off the front page so rapidly?

It was flagged by users.

This seems to be intended to apply to people operating exchanges like Mt.Gox, not lay consumers and merchants. Of course, it's possible they've drafted it, but this part of page 6 seems pretty clear:

Section 200.3 License... (c) Exemption from licensing requirements. The following Persons are exempt from the licensing requirements otherwise applicable under this Part: (1) Persons that are chartered under the New York Banking Law and are approved by the superintendent to engage in Virtual Currency Business Activity; and (2) merchants and consumers that utilize Virtual Currency solely for the purchase or sale of goods or services or for investment purposes.

We should get an actual lawyer to evaluate this, which I am not.

The license fee is only a minor portion of your internal would-be licensing cost; think of it as an agency rate-limiter. This tweet mentions $100K, before insurance bonds, but others have estimated more.

https://twitter.com/DCGco/status/629703816687038465

Here is more information:

http://www.coindesk.com/ny-bitcoin-business-45-days-bitlicen...

https://act.eff.org/action/stop-the-bitlicense

Laughable, but not surprising. This is just the kind of thing the Bitcoin community has predicted governments would do in an attempt to stifle/delay/prevent any potential financial revolution; to protect their fiat money printing monopolies.

what?? how is that possible?

How is it not possible?

Reply on news.ycombinator.com