Photo of Stefan J. Padfield

Director of the NCPPR's Free Enterprise Project. Prior experience includes 15+ years as a law professor, two federal judicial clerkships, private practice at Cravath, Swaine & Moore, LLP, and 6 years enlisted active duty (US Army). Immigrant (naturalized).

The following comes to us fromJ. Scott Colesanti and Mandy Li Weiner:

    To a degree large or moderate, New York shall soon be at the vanguard of Bitcoin regulation. Since last July, observers have been asked to witness the shotgun marriage of the coin of no realm and a daunting state licensing measure; to date, no vows have been taken.

    The initial proposal from the Department of Financial Services was truly bold and far-reaching. Eschewing a classification of Bitcoin itself, the Department took aim at parties doing business with State residents by issuing, buying/selling, converting or storing the notorious cryptocurrency (and other, similar virtual currencies). Such entities and operators would have been required to register for the popularly dubbed “Bitlicense” at an indeterminate cost.

The requirements attending the proposed Bitlicense were rich and varied. Traditional State consumer protection provisions focused on customer complaints and record keeping. More novel provisions seemingly borrowed from securities law authorities on business continuity planning and anti-money laundering programs, and from sister State warnings regarding cryptocurrencies as investments. Consequentially, New York’s broad, multi-layered protocol would have closed the door of entry to an appreciable number of businesses and startups, as well as related enterprises.

Not surprisingly,