Ben Lawsky’s much awaited BitLicense update in finally out. The final version of licensing regulations for Bitcoin and other cryptocurrency related businesses, better known as BitLicense was released yesterday by the outgoing superintendent of New York State Department of Financial Services. BitLicense has been a hot topic of debate since New York announced its intentions of introducing license regulations for digital currency companies.
The latest release of BitLicense introduced by Benjamin Lawsky will be the final version. The earlier versions/drafts of BitLicense drew flak from almost all sectors of the Bitcoin community for its shortcoming in addressing various issues. The new set of rules is almost identical to the previous version, except for few minor changes.
All digital currency exchanges are required to apply for BitLicense in order to operate from the State of New York. A product of about two years of deliberations, the final version of BitLicense has garnered mixed responses from the Bitcoin industry for not addressing all the issues. Unlike conventional money transmission regulations, digital currency companies have to meet much higher standards of requirements to be eligible for BitLicense.
According to Ben Lawsky, the final version of BitLicense has been modified to accommodate exemptions for developers along with slightly relaxed regulatory requirements for businesses. He went on to explain that the government doesn’t have any intention to hinder the development and progress of new technology and the BitLicense is there only to protect consumers and prevent illicit activity.
In order to receive BitLicense, the digital currency companies have to adhere to stringent reporting requirements and adhere to various customer protection, security, AML and cybersecurity rules. The final version of BitLicense addresses few concerns raised by the Bitcoin industry against the older drafts. The changes include –
- Standard software updates are not subject to any approvals, while material changes to the technology needs to be approved by the concerned authority
- The BitLicense and its terms will be applicable only to those entities that deal with funds from their customers. Developers will be exempted from it
- Companies dealing with both Bitcoin and fiat currencies are no longer required to file two separate applications
- In case of companies dealing with both digital currencies and fiat currencies, they are no longer required to submit multiple copies of AML reports to FinCEN.
- Bitcoin companies do not have to request for approvals for any change in investors unless the investor gains control over the company’s management or policies
The Bitcoin community was expecting more drastic changes to BitLicense than what was presented by Ben Lawsky