This May 1, 2014 photo taken in Washington, DC shows a bitcoin medal. Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network. The Massachusetts Institute of Technology (MIT) announced on April 29, 2014 it would give $100 in Bitcoin to its 4,500 students starting in the Fall of 2014. The project started by two MIT students aims for a better understanding of emerging technologies. AFP PHOTO \/ Karen BLEIERKAREN BLEIER\/AFP\/Getty Images ORG XMIT: - ORIG FILE ID: 529392797(Photo: KAREN BLEIER, AFP\/Getty Images) <\/p>\n
It's official: Companies dealing in cybercurrecy bitcoin now have to get a bitlicense to operate in New York state a rule that could spread to other states if successful. <\/p>\n
Just weeks before he is set to leave his regulatory role for private practice, Ben Lawksy, head of New York's Department of Financial Services (DFS), released rules Wednesday outlining what bitcoin peddlers need to do to obtain and retain a \"bitlicense\" to operate in state. <\/p>\n
DFS has regulatory oversight over dozens of N.Y. licensed banks and insurance companies, including Goldman Sachs, MetLife and Barclays. As head of DFS, Lawsky has has made it his mission to regulate cybercurrencies, which have been tied to some high-profile drug cases and other illegal activity. <\/p>\n
The 44-page document of final rules released Wednesday explains such details as cost of an application ($5,000) for a license, as well as what the license will allow companies to do. <\/p>\n
\"License required,\" the document warns. \"No person shall, without a license obtained from the superintendent as provided in this part, engage in any virtual currency business activity.\" In other words: No license, no bitcoin activity in the Empire State. <\/p>\n
The barriers to entry can be high. Companies seeking a bitlicense will need to have a compliance officer, for example, who will be responsible for making sure the firm is in compliance with its bitlicense rules, and all other applicable federal and state laws that apply to bitcoin, such as money trasmitter laws and laws to protect against money laundering. Such protections can get expensive. <\/p>\n
Lawsky's bitlicense has been controversial among folks who argue that the rules threaten to raise costs and restrict innovation. Some opponents have argued that the license will give large institutions such as big banks that are fearful of competition of the competition the advantage over smaller startups when it comes to growing the cyber coin. <\/p>\n
Lawsky on Wednesday vowed that he did his best to balance the rules and make them fair for both operators and the bitcoin users he is seeking to protect. <\/p>\n
\"Getting that balance right is hard, but it is key,\" Lawsky said in a speech at the BITS Emerging Payments Forum in Washing, DC, where Lawsky announced the new rules. \"We want to promote and support companies that use new, emerging technologies to build better financial companies. We just need to make sure that we put appropriate regulatory guardrails in place,\" he said. <\/p>\n
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'Bitlicense' rules regulating bitcoin released<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" This May 1, 2014 photo taken in Washington, DC shows a bitcoin medal. Continue reading