Breaking Down New York’s Latest BitLicense Revision

The New York State Department of Financial Services (NYDFS) released the latest version of of its BitLicense proposal today, an event that sets off another 30-day comment period before the much-anticipated regulation can be finalized.
The revised draft finds the state agency following through on a number of proposed changes it has previously announced publicly, while clarifying the intent and structure of the proposal.
Overall, the revised BitLicense displayed a willingness by the NYDFS to both respond to concerns from the digital currency and wider business community while largely leaving gray areas subject to its discretion and oversight.
Perhaps most notably, however, the revised draft included for the first time an estimation of the cost of applying for licensure, an amount priced at $5,000. The NYDFS indicates that the price is meant to offset the cost the NYDFS incurs by processing and reviewing the application, along with any relevant materials.
Licensees, the document notes, may also be required to pay extra fees for ‘additional applications related to the license”.
Enhanced supervision
If certain promised exemptions were granted, meeting the BitLicense requirements became potentially more onerous for digital currency startups in other ways, the draft document shows.
Licenses are now required by Section 200.4 to submit the names of any individuals ‘who have access to any customer funds, whether denominated in fiat currency or virtual currency’.
Startups will further need to provide identifying information for these individuals. As in earlier iterations of the proposal, key employees must disclose their name and address, as well as provide documentation related to their personal history and submit to fingerprinting.

This post was published at Coin Desk on February 4, 2015.