The New York State Department of Financial Service is proposing a new framework with ‘conditional licencing’ to complement the present BitLicense
Five years after New York’s stringent ‘BitLicense’ was made compulsory for every crypto company working in the state, its top financial regulator has proposed new licensing rules that will make it easier for companies to engage in the cryptocurrency business.
The New York State Department of Financial Services (NYDFS) announced on Wednesday that it is seeking public opinion on the matter: with New Yorkers free to submit their input until August 10. The initiative could ultimately allow crypto companies to obtain licenses in the state and overcome the current hurdles faced for acquiring the state’s BitLicense.
The BitLicense rules were unveiled a year after the Mt. Gox case where millions of dollars of Bitcoin were stolen. It was intended to be a regulatory framework that acts as a safety net for New York-based investors and streamline processes in the crypto industry. However, only 25 firms have managed to receive a license in the past five years. Businesses have spoken against the stringent requirements posed to obtain the license and claimed that it could take years to meet some of the criteria.
The newly proposed initiative stems from the “actual or perceived hurdles” that firms may face in obtaining the BitLicense, the regulator said.
The NYDFS is now proposing to introduce a conditional license that will allow crypto companies to continue their business and work towards finally obtaining the BitLicense:
“DFS expects that an entity that seeks a Conditional License will endeavour to eventually seek and obtain a full BitLicense,” the financial regulator stated.
The company must submit its documents along with declaring that it eventually wants to receive the BitLicense. DFS will then review the company and produce a list of stipulations that must be followed. If the crypto company fails to comply, the NYDFS “may, at any time, discontinue the conditional licensing,” the regulator warned.
The new initiative is also aimed at making it easier for crypto companies to offer and use new coins. The financial regulator will provide a list of pre-approved coins from which licensees can select to self-certify. The authority will allow crypto companies to ‘self-certify’ listings of new coins without additional approval.
“I said at the end of last year, we’re going to take a fresh look at that license and see how it’s working and not working and how we can improve,” NYDFS Superintendent Linda Lacewell said
“One of the things that we heard loud and clear is that we should find opportunities to open up the fields, that our license is good and solid, but we need to make it more available,” she added.