Bitcoin regulation is both a blessing and a curse, as regulators are trying to apply the same values and principles of traditional finance to a new breed of technology. However, that approach is not always beneficial to existing and up-and-coming businesses. In particular, New York’s BitLicense is raising a lot of questions.
Short Timespan To Complete Application
One of the main concerns surrounding New York’s BitLicense is the fact that existing Bitcoin companies have very little time to complete their application. If they fail or refuse, and continue their Bitcoin-related activity, they will be punishable by law for running an unlicensed business.
New York-based businesses have until August 8th to submit their BitLicense application. Until a decision is made on whether or not a certain company receives their license, they are operating in a compliant manner according to the letter of the law. However, if the verdict would be negative, said business would have to shut down operations in the New York area immediately.
“Any person engaged in virtual currency business activity that fails to submit an application for a license before or on the date of August 8, 2015, shall be deemed to be conducting unlicensed virtual currency business activity.”
Even though the above statement leaves nothing to the imagination, there is no official word as to how unregulated businesses would be penalized. Whether there will be a fine to pay or even a jail sentence remains a mystery at this point. An NYDFS representative did not reveal any more details to the media when specifically asked about how the law would be enforced.
A Hefty, Non-Refundable Fee
It goes without saying that it is beneficial for all Bitcoin companies active in the New York State area to complete their BitLicense application sooner rather than later. However, for every application, a US$5,000 non-refundable fee has to be paid upfront, regardless of whether or not the license is granted in the end.
On top of that, additional costs – the amount of which are to be determined by the NDFS – may apply. Every business is also obligated to submit any details on the everyday operations of the company, as well as the financial and legal history of the people running the company, plus the owner’s plans for running a business related to digital currency.
Ever since the final version of BitLicense was introduced to the public, several companies have withdrawn their service from the state of New York. One of the most notable services to do so is the BTC Guild Mining Pool, even though their closure had been announced weeks prior to BitLicense.
Source: BitLicense Final Version
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