The state of New York has historically had some of the toughest laws when it comes to the crypto sector. It has also sued various entities in the crypto sector. For instance, it has been embroiled in a protracted legal tussle with Bitfinex. However, the state may adopt a softer stance to the crypto sector in the future. The state’s financial watchdog, the NYDFS recently unveiled proposed changes to BitLicense, the law governing crypto activity in the state.
The Proposed Changes
According to the state regulator, these changes will offer clarity and efficiency to investors. Besides that, it will ensure that regulation for the sector is a reflection of the reality on the ground. It goes on to say that since the BitLicense was created, various virtual currency issuers have made requests to list additional coins.
To enable those holding BitLicense to issue new coins efficiently, the regulator is looking for feedback on a number of proposed changes to the law. The deadline for sending feedback on the proposed rules is January 27, 2020.
One of the main proposals is the creation of a site, where all the approved coins will be listed. Another proposal is to create a model framework where companies listing coins can come up with their own model systems. If a firm’s model is approved, it can list coins in the future without having to request approval from the regulator. However, this model framework would be subject to periodic reviews and changes when the need arose.
About BitLicense
The BitLicense came into force in August 2015. After its creation, many firms were forced to leave New York. Most experts in the crypto sector have accused regulators in New York of adopting a high-handed approach to the crypto sector. In their opinion, this has stifled the development of crypto in the state.
What This Could Mean for Crypto Regulation
New York is a global center of finance. It is home to the NYSE and various major firms in the financial sector. When it created the BitLicense in 2015, it was at a time when incidents of fraud were becoming prevalent in the sector. As a result, it is understandable that regulators reacted so harshly to the sector. After all, it would not want its reputation as a global center of finance damaged by fraudsters in the crypto sector.
However, things could change. A lot has changed since 2015. Various governments around the world have created regulation that governs the crypto sector without impeding its development. A good example is Japan, which is considered some of the most robust yet friendly regulations in the crypto world.
It is worth noting that the regulator is requesting feedback from members of the public. This could be an opportunity for experts in the crypto sector to air their grievances and propose changes that could be beneficial for the crypto sector. While the window provided to provide feedback is barely one month long, discussions about the best way to regulate crypto in New York have been going on for many years. The regulator can expect to get useful feedback from concerned members of the crypto sector.
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