Ben Lawsky Speaks with CNBC on Bitcoin Outlook Following ...

With Sheila Bair on the board and a license from Ben Lawsky, itBit opens the first charted US Bitcoin exchange

With Sheila Bair on the board and a license from Ben Lawsky, itBit opens the first charted US Bitcoin exchange submitted by nathanielpopper to Bitcoin [link] [comments]

Coinbase not fully licensed in NYC according to Lawsky

Coinbase not fully licensed in NYC according to Lawsky submitted by stop_runs to Bitcoin [link] [comments]

Who is to blame for MtGox collapsing and losing half a billion dollars worth of people's Bitcoins? That's right, US regulators.

Basically: Gox or any other exchange was unable to get regulatory approval in the US. Therefore they had to operate elsewhere, causing Americans to send their money overseas to a shady operation in a less regulated jurisdiction which subsequently collapsed. Therefore, "the regulators actions directly cost people $100 million" and "some blame rests firmly on the shoulders of Ben Lawsky and others who made it so people had no choice but to go to Japan to buy the product and service they wanted." The solution? Less regulation.
Full thread which is an all out war between the statists and the libertarians.
While the actual post is at +157 he is quickly called out in the thread by other commenters and downvoted:
this is the biggest crock of shit and i'm sick of seeing it brought up. nobody was forced to do anything.
What the actual fuck? You win a fucking golden medal in olympic-level mental gymnastics. Jesus titty-fucking Christ.
You have got to be kidding here. You're trying to blame regulators because people lost money in an unregulated exchange? Ho-ly shit.
submitted by blorg to SubredditDrama [link] [comments]

Bitcoin Regulation: Allow me to give you an Idea of What Is at Stake/a Day in the Life of a Regulated Financial Professional

When people ask for Bitcoin to be regulated the way other financial services are, they are typically people who have little idea what that actually means or would mean to them.
I’ve actually operated under those regulations for many years – let me give you an example using what I know best: the world of stockbrokers/ financial and investment advisors such as those who work for major brokerage firms. (I was a FINRA General Securities Principal / Supervisor and Registered Rep for about 18 years – this group covers all stockbrokers and financial advisors at major investment firms)
These examples are standard in this world:
So lets just pretend that Bitcoin is regulated the way FINRA financial services are:
Compliance costs total millions of dollars annually even for relatively small firms. This is why we see very few brokerage and almost no banking start-ups.
I could go on and on.
Next time you hear someone say “we need more regulation in order to help this space mature” take what they say with skepticism, especially if they have never actually lived and worked under such regulations.
Please join the Bitcoin Financial Association (for FREE for Reddit members using coupon code RedditB)
Also, please sign our open letter to finance regulator Ben Lawsky of New York (anyone can sign regardless of location or if you are a member or not)
EDIT: I forgot one of my favorites: due to concerns about protecting the elderly, you are forbidden from using the words "senior", "senior citizen" or "elder" in marketing material and marketing directed at seniors such as seminars held at senior community centers are a big no no
Edit 2 -- is Bitcoin different from a FINRA product? Of course....but make no mistake that the FINRA (or even worse, the banking) model is exactly the type of regulatory framework they would like to see
submitted by bruce_fenton to Bitcoin [link] [comments]

There is a 30 day comment period for the current Bitlicense proposal. Unless there are substantial changes, New York will be a Bitcoin dead zone

The 30 day comment period starts next week. Bitlicense, as proposed will force most companies that store customer BTC deposits to block New York IP addresses. There is very little chance that Lawsky will make any further changes to it, so what will this mean for Bitcoin around the world?
EDIT, as a reminder:
This is how the Bitlicense will affect Bitcoin businesses, taken from here:
(I've added modifications in light of changes in the new proposal and information that I found was missing in the original write-up)
Entities are considered dealing in virtual currencies if:
.. to any resident in New York. Web services, even those incorporated overseas, must either comply or block access for NY users. (200.2n)
Entities 'dealing in virtual currency' must:
The (only?) good news: Merchants do not need a BitLicense to accept Bitcoin for a good or service. (200.3c2).
> This post was created for general guidance, and does not constitute legal advice. You should not act upon the information contained in this publication without obtaining specific advice from a professional. No representation or warranty (expressed or implied) is given as to the accuracy or completeness of the information contained in this post.
EDIT 2, targetpro suggested expressing any concerns you may have about the proposed regs to the NY Dept. of Finan. Services:
submitted by aminok to Bitcoin [link] [comments]

Why You Shouldn’t Fear the Blockchain Regulators

Kevin Werbach is a Professor of Legal Studies & Business Ethics at the Wharton School at the University of Pennsylvania, and the author of “The Blockchain and the New Architecture of Trust,” from which this article is adapted.
In 2015, New York became one of the first jurisdictions in the world to adopt a regulatory regime for cryptocurrencies. The Department of Financial Services began requiring virtual currency businesses to obtain a “BitLicense” in order to operate or serve customers in the state.
“We want to promote and support companies that use new, emerging technologies to build better financial companies,” said then-New York Superintendent of Financial Services Ben Lawsky, when announcing the rules. He continued:
“Regulators are not always going to get the balance precisely right…. But we need to begin somewhere.”
Perhaps. Yet Lawsky picked the wrong somewhere. And he moved fast to formalize rules governing what was still, in 2015, a small-scale and fluid cryptocurrency community.
Bitcoin entrepreneurs and technologists argued that the threat of overbroad regulation, and the costs of compliance, would chill startup activity. More than 4,000 comments were filed on the draft rule, most of them critical.
And when the regulations went into effect, a substantial number of Bitcoin-related startups left New York, including the exchanges Kraken, Shapeshift, Bitfinex, and Poloniex. “The ‘Great Bitcoin Exodus’ has totally changed New York’s Bitcoin ecosystem,” declared the New York Business Journal.
Three years after the Great Bitcoin Exodus, the crypto-native exchanges have not rejoined the New York startup scene. But other firms have.
R3, the financial industry distributed ledger consortium with over $100 million in funding, is headquartered in New York. As one might expect, so are a number of finance-focused blockchain startups such as Digital Asset Holdings, Symbiont, and Axoni. Pillars of Wall Street such as Goldman Sachs, JPMorgan, and the parent company of the New York Stock Exchange are getting into the action.
And the activity is not limited to financial services. Consensys, a venture development studio building around Ethereum technology, grew from 100 to over 400 employees during 2017 alone in its Brooklyn headquarters, and is working on dozens of innovative projects around the world (though it recently announced significant layoffs). Blockstack, a high-profile startup hoping to build “a new internet for decentralized apps” on blockchain foundations, is located in New York as well. The New York bitcoin and ethereum meetup groups each have over five thousand members.
The BitLicense, for all its flaws, did not kill off cryptocurrency activity in New York. Neither did it create the model for regulatory innovation its creators intended. Subsequent jurisdictions developing cryptocurrency regulatory frameworks explicitly distinguished their policies from the overly restrictive elements of the BitLicense.

for more story...
submitted by smathium to u/smathium [link] [comments]

Tragic implications of the BitLicense with respect to Bitcoin 2.0 applications, smart contracts, smart property, Bitcoin law, digital voting and Ethereum?

Now granted, I am not a lawyer. I am a commercial pilot by trade and as such please forgive any misconceptions that I may have picked up as a layman in the Bitcoin universe, for my intellect is small but my aspirations are lofty.
It has occurred to me, however, that this proposed BitLicense represents problems for the Bitcoin ecosystem so far and above what may be evident at the moment. Mostly because regulators are attempting to square a circle and apply existing banking-type regulations to a digital and software controlled payment network/protocol. And not only that, if there is one thing that being in this community has taught me, it is to never underestimate the brilliance of these young new innovators in creating radical new concepts for the future... many of which (to me at least) would seem to be on a direct collision course with these BitLicenses. If I am wrong, please tell me why. Here is what I see so far...
1.) Smart contracts. If I enter into a smart contract facilitated by a lawyer's office and said office (as a part of its legal services) holds said private key/contract for me or transfers it to a third party as part of a multi sig transaction (let's say a will, deed or trust), would this lawyer now be considered a bitcoin business and as such be required to maintain all of the same onerous requirements as large exchanges and so forth? And more troublesome would seem to be the reporting requirements of this transfer. If attorney-client privilege is paramount and necessary, would not digital contract transferrence reporting requirements under the BitLicense now expose lawyers and/or their clients dealings to the public? Indeed, a promising aspect of digital bitcoin contracts/colored coins/etc would undoubtedly be their anonymity. What other businesses would undoubtedly try to harness Bitcoin for their purposes and what other unintended consequences could this regulation bring about?
2.) Ethereum presents us with the possibility to invent an entire universe of new digital financial products and contracts. Would each of these contracts require the transferring parties to be BitLicense holders as well? Would not DAC (digital autonomous corporations) touted by the Ethereum team also be vastly hampered by the reporting and financial requirements of the BitLicense? After all, such corporations would aim to be autonomously handling Bitcoin transactions of a global nature. This would seem to greatly hamper the innovative capacity of Ethereum which aims to allow multitudes of trustless decentralized systems in place of entrenched banking establishments.
3.) Would innovators designing new types of cryptocurrencies on potential sidechains to the Bitcoin network also be required to have BitLicenses? If those cryptocurrencies are actually pegged Bitcoin transactions on a side chain, do they even represent a "new" cryptocurrency at all for the purposes of regulatory oversight? What about test nets? Are these considered true cryptocurrencies at all if they only serve the purpose of being a testbed?
4.) Digital Ecosystem: If a decentralized, autonomous taxi cab service of the future (let's just imagine such a service for a moment, shall we?) employs a wallet service provider such as, would this not subject each and every rider to the same strict identity requirements as those transacting with Bitcoin exchanges? I realize it depends on how the individual company handles the taxi cab transaction, but I venture to guess that most companies would elect to have a third party do this for them, and as such would not the third party be required, as a licensee, to identify the fares? I use a taxi cab as an example because this would seem to be a use case for forthcoming google cars and what not. I am sure that if you use your imagination you can envision a future where almost all services interact digitally using Bitcoin...
5.) Voting: If a cryptographic election system is put into place, and used in the state of New York, would such a system be subject to the BitLicense requirements? And If I use a satoshi or other discrete transaction to cryptographically verify on the Blockchain that I have cast my vote at the booth, and you process it, are you, as the voting authority not then required to identify me and keep those records on file? I am grasping on this one, but it does not seem out of the realm of possibility.
As a mere layman, I am very troubled by the onerous requirements of the proposal set forth by Ben Lawsky. If even I, with my hamster brain, can envision such a universe of potential problems erupting from these regulations what does that say about the current state of our regulators? Am I wrong on many of my assumptions? Am I misreading the BitLicense? It would seem that perhaps regulators should adopt a wait and see approach before diving into this fray. Even the "experts" themselves do not truly know the implications of many of these evolving technologies. How will they interact? What innovative constructs will they give rise to? If even one of these constructs evolves to be the next "killer app" for Bitcoin what unintended consequences to the state of New York could this bring in hampering a potential supernova of innovative capacity and economic activity?
As a regulator, you need to be asking yourself, "What is the purpose of my regulation, and how best can I adapt it to suit and protect the public which I serve. How can I foster innovation and invention while still creating a legal, stable and sound baseline for infrastructure to grow?" If said regulation hampers and stifles innovation, particularly with a global peer to peer network such as Bitcoin, it would seem to be trivial to push such innovation elsewhere, at the expense of your own tax coffers and revenues. More digital business=more money for you, the regulator. More regulation=less digital business.
But most troublesome of all is the notion that many other states or governments might look on the proposed BitLicense as a template for their own misguided approaches at regulating the nascent and undiscovered land that is digital currency. I personally would be scared to death of approaching this task with haste. You simply DO NOT KNOW what you are doing, because none of us truly know yet. As such, you owe it to the people of the state of New York to start with a bare minimum and ADD TO. We all know that in the government, it is much easier to add to, than take away. On a slightly humorous note, it would seem that you are trying to square a circle, when in fact you should be looking at this is as trying to "infinity an infinity".
Edit: I have contacted the NYDFS directly [email protected] to make an attempt to publicly comment on their proposal but have yet to receive a reply on the proper correspondence address.
submitted by AstarJoe to Bitcoin [link] [comments]

Truth you don't want to hear. Bitcoin Price Matters. Grow the fk up.

Listen, I am a Crypto-anarchist. I've read all those books you've read - Ayn Rand, Friedman, listened to the Molyneux podcasts and all that.
And I just went full time on Bitcoin. So yeah I am in this boat with all of you.
But I also worked on Wall Street for many years and all I see is amateur hour in the bitcoin community and people with no fucking business sense.
You want to extend the commenting window for Ben Lawsky to set regulations for NY? Yeah go fucking do that. And watch every startup in the space run out of money waiting 2 years to get clarity while you write your letters of 'truth'.
You want to keep being 'intellectually smart' and go to meetups about Stellar this week, Ethereum last week, Bullshit coin next week and watch Bitcoin startups fail in the meantime? Then go ahead.
You want to keep showing up at Bitcoin conferences spewing your bullshit to make yourself sound hard saying stuff like "Ethereum is Bitcoin 2.0. I see a world of many successful altcoins each with their own purpose" or "I will die defending freedom and I don't care how much it costs me, I will never get in bed with those evil regulators" Go right on ahead.
But remember this: Currencies are winner take alls. The only reason we have many different 'healthy' fiats is because these countries all have a military to defend their own paper. That's why GBP, USD, EUR, CNY etc can coexist for now.
In Crypto space however, there are no borders or guards. You can freely switch from one coin to another. That means 1 crypto will win and only 1. If you spend any time or money on altcoins, it means you either don't understand how money works, or you have left Bitcoin. The first thing you should say then to other people you see at a Stellar meetup is "My name is Bob. I hate fiat and I hate Bitcoin." You can't believe both Bitcoin and Stellar can have monetary value. Believing that just shows you're an amateur. Stripe, you're anti-Bitcoin.
Here's my message to you all: Stop fucking supporting 18 year old engineers with no idea of how money works who come up with fancy new features for some new bullshit Ethereum coin. Stop thinking it's fun and funny to get some Doge. Stop thinking somehow that because Stellar is being distributed in a more fair way than Ripple that it's going to end up being worth any monetary value. If you trade on an exchange that also supports litecoin, that means they have no idea what they are doing.
Bitcoiners and Altcoiners are enemies not friends. If you want to convince me your Ethereum is 2.0, then show me your skills by breaking Bitcoin first. Otherwise, you are a supporter of the state. You are as big a harm to Bitcoin as anybody in government. The people that should be giving you Bitcoin for Ether are the corrupt politicians.
Bitcoin's Price is why there is even a conference for you to get paid to speak at. Bitcoin's Price is what pays your salary at your startup. Bitcoin's Price is the only reason VCs have poured money in.
If you believed in Bitcoin, you'd let the regulators pass whatever they want - paying no attention to them. If you believed in Bitcoin, you'd let anyone invent their own coin - paying no attention to them. The sooner regulators can help take it mainstream by making it 'safe' the sooner you can get to work finding a workaround for Bitcoin. Letting Lawsky play the delay game means a ton of bitcoin startups will fail.
The only thing you should focus on is 'what can I do today to help the Bitcoin price go up'. Cause the honest truth is unless the price keeps going up, there isn't going to be more jobs, more conferences, more startups, more freedom, more prosperity, more people in this reddit thread. So either help the cause by hoarding Bitcoins, developing for the Bitcoin ecosystem and the Bitcoin ecosystem only, or GTFO.
Nothing else matters.
submitted by btcgrowup to Bitcoin [link] [comments]

A bitcoin search safari: Bitcoiners and the Jewish Religion.
If the Jews are buying bitcoin, I'm sold.
The talmud allows Jews to lie and cheat none Jews. Why is anyone surprised they got swindled by Ben Lawsky? People were warning about him being a two face and they were actively downvoted by this subreddit. Wake up dummies..
The Israeli government and the Israelis are also under control of the bankers, tycoons and the US.
My coinbase wallet has the words "gay Jew" written into it- am I being punked?
Ironically, being into bitcoin is akin to being a jew.
To be fair BTC is against the Rothschild cartel who appear to be Jewish
If anything bitcoin is a huge blow against international jewry.
That's fine if they are. Most studies show they have a higher iq. The problem is when they run the banks and give their friends and family more loans than others. This is intrinsically unfair and essentially evil
Why is it when Christians band together to make money its a cult but when jewish people do it its business as usual?
I'm not Nostradamus, but I'll ballpark it and say by the end of 2013 Bitcoins will be worth anywhere between $200 and $250. Since they're only $12 right now, you're looking at an enormous return on investment; far more than any typical Jewish bank will give you.
Please stop posting this Jewish bankemedia attempt to besmirch bitcoin. We are going to see this time and again from the Jewish bankers. This will not be the first time.
The globalist banking cartel are Jewish supremacists that use their money power to wipe out all racially homogenous nations, especially White nations.
The libertarian movement is at it's core Jewish.
If we unite, we can win this war against governments, big corperations and rich Jewish families who pull strings in the background. You think we live in a democracy? It's nothing but an illusion.
the current economic mess can be directly traced to Jewish economic practices brought into fruition through Milton Friedman and Alan Greenspan.
Hitler was a Rothschild and so Jewish by decent. But the term Nazi was just a derogatory term coined by Zionists at the time. When you understand that Hitler was actually nothing more than a piece in the Zionist's chess game things become a bit clearer.
he's just a Jew. This is normal behavior for them since they're miscegenated and later inbred leading to neurosis and mental deviance.
Cavirtex is owned by a greedy kike, but is necessary to use for high rollers.
once you dispel the lies of these filthy thieving kikes and their degenerate goy monkey slaves, will you truly understand what the Nazis were about.
The Jewish subconscious is marked by paranoia and fear. I have many Jewish friends and they all atest to this. Now look at the bitcoin 'community' what it tends to project...
And so on.
submitted by Hodldown to Buttcoin [link] [comments]

Bitcoin 2017 a Comprehensive Timeline

Some of the most notable news and events over the past year:
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submitted by BitcoinChronicler to btc [link] [comments]

A few thoughts - Friday, July 18, 2014

Good afternoon! Yesterday was the darkest day in at least the recent history of bitcoin, perhaps ever. I'll get into why yesterday was more significant than Mt. Gox and China later, but the end point of this post is going to be that these proposed regulations are a breathtaking expansion of government power into areas of commerce that have never traditionally been regulated. If this passes, we may well find ourselves fighting against bitcoin acceptance.

Some basic truth about The Law

First, it's important to eliminate a common misunderstanding in /bitcoinmarkets. Some users are arguing that this law (lowercase letters) isn't that bad because while it covers a broad range of activity, it is only intended as a tool to fight money laundering (or some other goal, depending on the user). People need to understand that the long arm of The Law (capital letters) does not care what laws were actually intended to do. You either violate them, or you do not. A judge isn't going to allow a business to operate based on the argument that this law was intended for a different purpose.
As you make your evaluation of the effects of this law, you need to consider every possible activity that could be illegal under it. You can't write off certain activities because they were unintentionally added to the law. The Law is not compassionate and does not allow people to get away with things because the creators were trying to prevent some other behavior. There are many examples of poorly-designed laws that have had devastating unintended consequences.

Some examples

Now that we are clear that the intent of the law doesn't matter, I thought it would be worth sharing how a few examples of bitcoin-related activities in New York will work. This section includes three rows each. The first is the activity, the second is an example of what I would consider some reasonable regulations, and the third is the actions needed for compliance under this law. Since there are an absurd number of requirements for each case, I only listed one or two of the most ridiculous for each.
Activity: Operating a tipping bot that sends $0.25 tips to residents of New York that holds balances
Reasonable: Require the tips to be backed with 100% reserve in the tipped currency
Lawsky: Collect personally identifiable information about all people ever tipped, retain it for 10 years, and submit paperwork to the department when tips qualifying as "suspicious activity" are sent
Activity: Changing a variable in the bitcoin code and creating a new blockchain for testing a proposed feature
Reasonable: No regulation
Lawsky: Register with the NYDFS, payi thousands of dollars, wait 90 days, and undergo a background check with the FBI
Activity: Operating the Elgius mining pool, which adds PPLNS payouts to its own blocks, so that users never have outstanding balances
Reasonable: Allow people to take civil action if their payouts don't match what they are owed
Lawsky: Register as a money transmission service, develop compliance programs, and conduct "intrusion prevention" tests against the nonexistent wallets
Activity: Running a business like, which does not hold any balances whatsoever in dollars and pays all employees and vendors in bitcoins
Reasonable: Require recordkeeping of profits and expenses similar to current laws
Lawsky: This business model is expressly prohibited; no business is allowed to take profits in bitcoins
Activity: Operating an altcoin exchange, which takes untraceable litecoins and exchanges them for untraceable nanotokens
Reasonable: Prohibit fractional reserve banking and require that reserves be kept in the currencies they are backing
Lawsky: Requires altcoin exchanges to back its reserves in dollars and to associate every altcoin address with a username. If there is a bubble, the business goes under because it is no longer able to back customers' deposits.
Activity: Being a one-time arbitrator, where two parties trade something and use a multisignature transaction with you as the decider in the case something goes wrong
Reasonable: At most, require background checks on the arbitrator to verify his integrity
Lawsky: File paperwork with security plans, a list of anyone who might help you with collecting evidence to make the decision (even if you are never called upon to do so), and obtain background checks and fingerprints for all of them; pay thousands of dollars to register, wait 90 days to be approved, file suspicious activity report if the transaction is over $3k regardless of whether you are called upon to arbitrate or not
Activity: Modify your mining pool's pay-per-share algorithm to prevent block withholding attacks, or introduce a new algorithm like PPLNS, without branching out into other business areas
Reasonable: No paperwork necessary
Lawsky: File new request with the Department and wait 90 days for the new model to be approved before rolling out the feature, while competitors in other states launch immediately

Businesses no logner possible to be served to New York residents

In addition to the regulation requirements, there are also some types of business models that simply cannot overcome the regulations at all. Here are some of those types of businesses:
Arguably, the following business types could also not operate in New York because of cost concerns:
The greatest problem with these regulations is simply that there is no clause for the amount of money the company has to control. While we plan to take all possible security measures, our pool's greatest security measure is that we automatically pay out balances that are too large, so that we will never owe more than $10k in customer funds. If there were to be a hack, then we would simply eat the cost of less than $10k from personal funds because it is a small amount. The reason this works is because it would cost more than $100k to provide the sort of professional infrastructure that Lawsky is requiring, so even if the site were hacked ten times, and even if we never fixed the security holes, we would still be ahead.
That's why this legislation is irreparably flawed and cannot be salvaged. It makes sense for people holding a billion dollars to be subject to strict regulations. It is nonsensical to require people who hold $5k in customer funds to spend $200k/yr in compliance measures, given that taking 40 hacks are still preferable to such ridiculous regulations.

The likely outcome of these regulations is less protection

Now that we know the local effects on certain types of businesses, we should ask what the end result is going to be a year from now, should these regulations not be completely overhauled. I propose that the end outcome of these regulations is going to be less consumer protection and more crime. The only businesses able to operate in New York will be huge banks and hedge funds. While the banks charge excessive fees and rip customers off, they already are far more trustworthy than Mark Karpeles ever was. They already practice good security anyway because they understand (unlike Mt Gox) that customer service is important. The law isn't going to have much impact on them. Furthermore, these guys aren't even into the bitcoin business yet, so (at least at first), the only people the law effects are the small guys.
Meanwhile, everyone else other than the banks is going to do exactly what we may be forced to do: milk the system by applying for licenses and waiting as long as possible, and then, on the day before compliance is required, ban New York residents from our service and avoid doing business with anyone in New York. However, it will be impossible for us, or anyone else, to eliminate every single New York resident from our system no matter how hard we try or how good our intentions are. Because there is no minimum funds limit, New York residents are going to find that they are excluded from the use of nearly every altcoin, mining pool, exchange, open source project, wallet service, auction site, escrow system, and so on.
They key here is that by making the regulations too hard to comply with, every site is going to be equalized. If the cost of compliance were low, then honest businesses would have no problem complying. When the cost of compliance is high, there is no distinction between honest and scam businesses because New York residents will have to do business illegally. This leads to more scams and losses of money. Whereas now a New York resident who uses a service available in New York can sue the provider of a scam, they have no recourse in this proposed new world. After all, the New York resident was engaging in illegal activity by using a non-licensed business. This allows scammers to directly target people who live in New York because they have fewer legal protections than do people who live in other states.
I'm very glad that I do not live in New York right now, and I actually feel sorry for what those who have been in bitcoins since the beginning and who live in New York are going to be unable to take part in the future.

About money laundering

One of the reasons we got into this mess is because the Federal government ignored consumer protection. While they were issuing regulations about money laundering, people like Mark Karpeles were able to take advantage of a complete lack of attention to consumer protection. The Federal government wasted millions of dollars in its cases against bitcoin_charlie, who is not accused of stealing any money or participating in any violent behavior, while ignoring real consumers who were being ripped off by exchanges operating as fractional reserves like Mt Gox and Vircurex. BenLawsky is now able to seize upon the Federal government's inaction and make himself look like a hero of consumer protection because New York will do what the Feds didn't do.
Proponents of anti-money laundering regulations argue that terrorists have been significantly hindered by restrictions in moving money. Terrorism is a great excuse for many things. Consider the case of airport x-ray screening devices. Every time a person goes through one of those devices, he has a 1 in 30 million chance of developing cancer as a direct result of the x-ray exposure pushing that person over the cumulative radiation exposure threshold at which cancer would develop. The risk of dying in a terrorist attack on the plane before the machines were installed was also about 1 in 30 million. Therefore, we spent hundreds of millions of dollars on machines that kill as many people as the terrorists do. Not only that, but anyone would rather die in a terrorist attack than go through chemotherapy and years of pain in a long, excruciating death.
People seem to accept that money laundering rules are necessary, and are pushing the bar of regulation lower and lower every day. How much would your risk of death really increase if money laundering regulations were loosened? If you have a 1 in 1 million greater chance of death but vastly more freedom in your finances, wouldn't you take that? In a perfect world where people didn't die, that would be an unacceptable compromise. In our world, however, people do die. It is ludicrous that people allow themselves to become obese and then live in fear of a terrorist attack.

The creation of a new kind of criminality?

There were some shameful comments from people like the Winklevoss twins yesterday about how they appreciate regulation of the industry. For those guys, it's all about getting rich, which isn't surprising given how their wealth is largely based on winning lawsuits rather than actually creating stuff. Few people seem to be reading the text of the document and understanding how this goes beyond bitcoins. This is a breathtaking expansion of government power that has never been seen before in the financial world. The regulations in this document expand the scope of financial oversight into industries far removed from anything that is covered by existing financial regulations, like open source development. For the first time, they dictate how businesses may pay out profits and promote inefficiency by requiring a bitcoin -> dollar -> bitcoin conversion, widening the pockets of Coinbase. They signal the creation of a huge bureaucracy that will require ever more taxpayer dollars to process millions of "suspicious activity reports," licenses, and minute software changes.
But most importantly, they require recordkeeping and information gathering of unprecedented scope, and trust so many entities to gather these records that they will be leaked to everyone. People running small mining pools that pay out $0.30 per day will be retaining passport numbers. Some people are viewing this as the "government" collecting information on people, but the government already has all this information. What will happen is that these records will be so prevalent because so many people are mandated to collect them that every hacker in the world will have a copy. In what other area of business are so many people required to keep huge databases of passport photos, utility bills, and other documentation that enables all sorts of criminal activity? These records will exist for at least 10 years, be copied in mergers and acquisitions, and leaked to the media and to the criminals, who will pay record sums for them.
The criminals and rogue insiders can use the data not only to perform identity theft, but to learn everything you ever bought, who your contacts are, where you live, how much you earn, what time of day you are away from your house, and what sites you use. They can phish for passwords at just the sites you use, arrange a theft when they recognize you are on vacation, threaten to phone your employer with false allegations of rape unless you pay up, use stolen wallets to frame you by purchasing child pornography with them, and contact repressive governments to have you arrested for associating with a known dissident.
That brings me back to the opening sentence in these thoughts for today. If these regulations pass and spread to other jurisdictions, we may actually find ourselves opposing the uptake of bitcoins. If more states adopt these regulations and people start adopting, then the stage will be set for an increase in government power to track everything about everyone, and a corresponding increase in criminal activity.
I said in the past that bans on bitcoins would not have an impact on the technology because people would go somewhere else, so they were not a change to the fundamentals. Few anticipated such a dramatic expansion of government power like we saw yesterday. Using the technology to procure unprecedented amounts of data would be a change to the fundamentals which even Nakamoto probably didn't intend.


submitted by quintin3265 to BitcoinThoughts [link] [comments]

Novauri's comments on the BitLicense

Hello, this is Will from Novauri. You almost certainly haven't heard of our company before. We are not planning on releasing it for use until 2015, and we haven't spent a dime on marketing. Still, our team feels strongly about the emerging BitLicense regulations in New York, and I wanted to share the letter we sent to the DFS with the community today.
We already shared our views within days of the proposal being released here, but we've had much more time to craft a formal response. You'll find an abbreviated version below, and a full copy of our letter on our website here.
I know this is a somewhat 'dry' topic, but it's important to the future of bitcoin in the US. Our thoughts on this topic are below. Thank you.
About Novauri
Novauri is a virtual currency startup based in Denver, Colorado and San Francisco, California. Novauri will allow bitcoin users to purchase and sell bitcoin using ACH debits and credits from their bank accounts. The service will be available initially to US consumers in early 2015.
We are different from our competitors in that Novauri will not control the private keys to our customers’ bitcoin addresses. Not only will Novauri never have access to customers’ private keys, but our systems are designed so we will never see private keys in unencrypted form.
We intentionally built this feature into our service as a risk protection measure for our customers. Novauri cannot suffer from the catastrophic failures and massive internal thefts we’ve witnessed at services that pool customer bitcoin and control their private keys because Novauri never has control of our customers’ funds, bitcoin or US Dollars. We feel strongly that this feature is both safer for our customers and cheaper for us as a service provider. Our design requires no expensive security layers around pooled wallets, no insurance for massive, pooled wallets that are vulnerable to insider theft, or regulatory responsibility as a fiduciary holding retail customer deposits like a bank.
Innovation, bitcoin, and concerns about the proposed rules
We believe bitcoin and its underlying blockchain technology is the most significant invention of the century. Bitcoin allows for unique digital information that can exist safely on the open Internet without the protection of a central authority. Bitcoin’s unique combination of cryptography and “hashcash”-based proof of work consensus with an integrated economic incentive to participate in the consensus that also creates an automated, and fully predictable monetary policy is something we’ve never dreamed of before 2009. The applications for this technology extend far beyond payment systems, and have the capability to uniquely identify anything digitally; a possibility that becomes exponentially more exciting when it intersects with other emerging technologies, such as the Internet of things, drone applications, or holograph-based UI and peer-to-peer communications.
That being said, we believe the proposed BitLicense regulation falls short in three key areas:
1) Redundancy with existing regulation, and creates an unfair playing field
Novauri believes that the BitLicense regulation is written in such a way that it will greatly stunt growth and drive innovation to other States or Countries entirely. The regulation contains provisions that exclude existing banks from the rules entirely.
Novauri recommends removing the provisions that exempt banks entirely, and replacing the redundant and overreaching language in these areas with a simple statement: The rules and regulations applying to bitcoin at a Federal level (especially from FinCEN) shall apply to all applicable virtual currency businesses with activities in New York State.
2) KYC provisions and ineffective cyber security provisions are dangerous for consumers
Perhaps the most dangerous aspects of the proposed regulations are the identity verification processes. We’ve already seen the disasters that the data retention provisions in the Bank Secrecy Act have caused in terms of the ongoing identity theft epidemic. Every week another bank is hacked, and more and more personal information goes up for sale on the darknet. We feel that these issues are an unintended consequence of the data retention requirements in the BSA, as well as the decision by certain companies to monetize “big data”. Novauri feels that these are misguided regulations and business decisions, and is vehemently opposed to corporations storing and selling personal information. The economic costs of identity theft greatly outweigh any advertising revenue made by these companies, and the cost to taxpayers in reimbursing billions and billions of dollars in stolen tax refunds each year, to say nothing of the stress these unintended consequences cause normal people when they discover their identities have been stolen.
This issue will be far worse with bitcoin, which features a public ledger. As soon as personal information is leaked, it can be associated with the blockchain and the entire financial history of individuals will be viewable by anyone. As written, Novauri feels the proposed KYC provisions in the BitLicense proposal constitute a potential threat to our National security.
Novauri recommends that the NYDFS delay the requirements around KYC until a more elegant solution evolves that doesn’t risk massive identity theft incidents or violations of personal privacy. We recommend full synchronization with existing regulation, and revision such that an individual’s right to privacy is balanced against the needs of law enforcement. This synchronization should also include checks and balances that are non-existent today.
Regarding “cyber security”, Novauri believes that the regulations are ineffective, as technologies are continuously evolving. Novauri recommends that the NYDFS require businesses that act as fiduciaries for customer deposits and maintain control of private keys to hold deposit insurance for 100% of the value of all fiat and virtual currency deposits. If the business has faulty security, the insurance company can make that determination and increase their premiums. In the event that the business’s security is unsafe, the insurance companies will not issue insurance at all. This is a “future proof” way to ensure cyber security without politicizing the topic or risking that rules and regulations become ineffective and anachronistic with time, as they almost certainly will as written.
3) Failure to create a risk-based system that scales with the risk of the service
The proposed regulation doesn’t differentiate between businesses that exchange fiat for bitcoin while taking control of deposits, those that exchange fiat for bitcoin and do not take control of deposits, or even businesses that exchange no currency at all and have no responsibility as a fiduciary. This will effectively kill all small businesses and startups in the State of New York, and if these rules are used as a model in other States, will drive the industry offshore entirely.
Novauri recommends creating at least two types of businesses under the proposed BitLicense regulation:
Virtual Currency Retail or Investment Banking Providers would be regulated in a manner similar to banks, but Virtual Currency Retail or Exchange Service Providers would be subject to minimal regulation. Again, Novauri highly recommends using insurance as a way to “future proof” the areas of cyber security and KYC provisions.
In closing, given the possibilities presented by this emerging technology, Novauri requests that the NYDFS consider revising the rules heavily, adopting a progressive and risk-based approach that uses insurance in lieu of prescriptive measures, removes duplicative rules and regulations, and gives the technology the room it needs to grow and evolve.
Will Madden Founder & CEO Novauri, LLC
For a full version of our comments on the BitLicense proposal, please visit our website here.
submitted by MrMadden to Bitcoin [link] [comments]

The official bitshares client will be able to send and receive bitcoin from next week! Decentralized bitcoin hedging is here!

I've heard from a bitshares core dev that the shapeshift API will be integrated directly in the official bitshares full node possibly as early as next week, and will also be included in the light wallet (still in beta). This is huge for both bitcoin and bitshares!
This means that you can now use BitShares as a decentralized hedged bitcoin wallet. You can receive bitcoins from an exchange or from your friends, and hold it in bitUSD, and then send it out again to a bitpay integrated merchant, or lighthouse, or a bitcoin debit card or wherever else you want. All done exactly the same way as you send bitcoins normally using normal bitcoin addresses, except that while you hold the bitcoins they are hedged against volatility so if you send in 100 USD worth of bitcoin you will be able to send out 100 USD worth of bitcoin as well at any point in the future. All this is done without counterparty risk, you hold your own private keys at all times, and you need zero AML, zero anti-terrorism anal probes, and there's no way your money can be seized or frozen - just like bitcoin was always meant to be.
It's this kind of feature that is going to make bitcoin go mainstream. If anyone can hold and use bitcoins without having to worry about volatility we will begin to see an increasing amount of people shifting their money into crypto. As bitcoin is the onramp and offramp for all cryptocurrency, and is the payment rails on which cryptocurrency will be spent, the more money that goes into crypto as a whole the more bitcoin benefits. Bitcoin is already the most convenient way to spend your money in the whole world, with the addition of decentralized volatility hedging by consumers there's no reason why all commerce shouldn't go through the bitcoin network. BitUSD itself will never be a threat to bitcoin as a payments system. No merchant is ever going to accept BitUSD since it's so much easier to accept bitcoin since it has all the infrastructure and enables you to accept bitUSD as well, so bitcoin and bitUSD will never have to compete, but can instead grow side by side.
I know there's still going to be plenty of people who insists that bitUSD is a shitcoin and is useless for anything, but i hope some people will be able to realize that it is something that complements bitcoin rather than competes with it, since it will never be able to match the branding and network effect of bitcoin, but can help with consumer adoption.
As the USD starts to seriously tank it will also be possible to hedge your bitcoins to other assets, such as gold (using bitgold), so until bitcoin itself has become big enough to remove volatility there will be plenty of options to enable people to use it without volatility concerns.
The BitShares ecosystem also has a lot more to offer bitcoin as well. Bitshares has blockchain registered names that are compatible with bitcoin addresses (because bitshares uses the same type of private keys as bitcoin), so in the future we might be able to send bitcoins to human readable names instead of incomprehensible public keys, another important step that will help with mainstream adoption.
Another thing are the paid delegates. Bitshares' "miners" get paid a salary in order to improve and develop the system and blockchain. But as bitshares begins to have more money at the disposal of delegates this method of funding can also begin to benefit bitcoin (since bitcoin adoption and merchant acceptance benefits bitshares directly). Instead of having the bitcoin foundation controlling the bitcoin core developers, some of the core developers could be bitshares delegates and be funded in a completely decentralized manner in order to protect and grow both ecosystems. If the cryptocurrency space (and thus also bitshares) grows enough to afford it we could also see things like lighthouse delegates that use their delegate pay to support open source lighthouse projects that benefits both ecosystems - systems like bitsquare are the future for all cryptocurrencies and it is important they are well funded if we are to succeed.
Finally there's the decentralized exchange itself, which is what BitShares was always meant to be (the whole concept was in fact conceived by the lead dev after mtgox had its funds seized in 2013). It's still not widely used, but bitshares has a bitasset for bitcoin as well, called bitBTC. With BitBTC you can trade the price of BTC and USD directly on the blockchain without any sort of counterparty risk, and as soon as you want real bitcoin again you can convert them instantly through a gateway like meta-exchange or shapeshift (if they add bitBTC in the future). The hope is that one day all bitcoin trade can be done entirely without centralized institutions, making the entire cryptocurrency ecosystem completely immune from ben lawsky and regulatory crackdown.
One last thing before someone calls me out on it, regarding the counterparty risk. Since shapeshift has momentary control of your funds it isn't actually completely free from counterparty risk, however the risk is greatly reduced from other systems like coinbase, bitstamp or paypal that just hold all your funds outright. The worst shapeshift can do is to steal the volume they process over a period of time until the community is alerted. Because the payoff is so low you can be guaranteed it will never happen (assuming they seek profit). Lets assume they take 0.1% fees and will be able to steal 1 hours worth of volume before people stop sending them money (there will likely be automatic alert systems in the wallets making the time significantly less). This means that they will at best be able to steal 40 days worth of income, but lose all future income as a result. It should be obvious that this will never be worth it, especially considering the fixed costs they have put into establishing the business.
submitted by Rune4444 to Bitcoin [link] [comments]

Counter-proposal: A new website banner for every bitcoin exchange and ewallet service in the world outside of NY

"Not available for residents of the state of New York, USA. Please contact Ben Lawsky, Superintendent of the New York Department of Financial Services, for a detailed explanation."
In my opinion, we should encourage every bitcoin-related website in the world to post this banner on their home page.
We need to unite and send a clear message.
Can someone crafty please create such a banner that we can distribute and display everywhere?
Edit: Even if your bitcoin service doesn't do anything to actually prevent NY residents from using it, and even if you're not running an exchange or wallet, I believe it would still send a very loud message all the way to NYC if it gets displayed everywhere anyways. (Bitcoin Foundation, I'm looking at you!)
submitted by paleh0rse to Bitcoin [link] [comments]

The New York State Attorney General lives in Alternate Reality !

Dear Friends,
Legal Parallel Universe is the first thing that came to my mind when I read this final legal reply.
Pierre says it in a different way:
According to Defendants-Respondents’ response to Plaintiffs-Petitioners’ Cross-Motion for Limited Discovery, they should be entitled to live in a legal world where virtually no one has standing to challenge a regulation involving new technology or new markets, and where no plaintiff ever has grounds to seek limited discovery.
Now that all the documents are filed there shouldn’t be any more delays and as you can read in the rest of Pierre’s brief (which is located: we are requesting experts.
Ben Lawsky is a Lawyer and a politician. He is a good one but he is not an economist. Nothing in Benjamin Lawsky background predispose him to lead the NYDFS. It was just the best illustration of cronyism within the New York and Wall Street democratic establishment. His testimony is to explain why he ignored Professor Williams’ comments.
During the hearings on the proposed regulation, Mark T. Williams’s written testimony establishes that Bitcoin should be treated as a commodity, and not as a currency, yet Defendants-Respondents did not address Mark T. Williams’ position. Additionally, supposedly, the Defendants-Respondents conducted “extensive research at analysis” when they proposed the Regulation, yet the research and analysis has never been produced so it is unclear how Defendants-Respondents came to the conclusion that Bitcoin could be regulated by them.
As New Yorkers, we might understand that it’s bad politics to listen to Bostonians professors. We know that our Public University professors might not be the most distinguished but we will settle for one that is been quoted by the Attorney General.
We need to have a professor in economy and the state of New York has so many on their payroll, we are simply asking the judge to make CUNY professor available to us since his conclusions are being quoted by the Attorney General.
The citation to Mr. Krugman’s article was taken from the following passage in DFS’s opening brief: These terms—“medium of exchange” and “form of digitally stored value”—are commonly used to describe financial products and services. See, e.g., United States v. Faiella (observing that “money” in ordinary parlance means “something generally accepted as a medium of exchange, a measure of value, or a means of payment”); Paul Krugman, The Int’l Role of the Dollar: Theory and Prospect in Exchange Rate Theory & Practice 8.2 (John F. Bilson & Richard C. Marston eds., 1984) (noting that money generally “serves three functions: it is a medium of exchange, a unit of account, and a store of value”); see also United States v. E-Gold, Ltd. (holding that “a ‘money transmitting service’ includes not only a transmission of actual currency, but also a transmission of the value of that currency through some other medium of exchange”).
Legal scholars might call the Attorney General logic a Legal Parallel Universe. I personally would simply ask what medicine those attorney representing the state of New York are on.
Defendants-Respondents cannot have it both ways -- have the Court believe that Plaintiffs-Petitioners discovery motion should be thrown out just because of the absence of any merit to Plaintiffs-Petitioners’ case and argue Plaintiffs-Petitioners’ petition should be dismissed on an unresolved threshold issue. Either Defendants-Respondents should not have filed their Cross-Motion to Dismiss or limited discovery is necessary on the threshold issue as to the economic nature of Bitcoin.
Please share the date of October 10, 2017 with everyone interested in attending. It’s going to be historic!
All the documents of the lawsuit are on the website here:
See you on the 10 ! (and don't forget Morpheus waiting for his trial from his jail cell.)
Theo Chino
submitted by theochino to Bitcoin [link] [comments]

Bitcoin cured me of any libertarian leanings.

If the rumors of market manipulation are true then I 100% support regulation. I'll take Ben Lawsky over the BearWhale any day. I'll take bitlicence over fractional reserve Chinese exchanges.
Bitcoin has up until now been a great experiment in libertarianism. And the results of the experiment is that regulations are better than ass-rapings.
I'll keep hodling my 15 BTC (purchased around $600) because maybe in 3 years regulations will cause the price to rise slowly. I'll keep buying things with new bitcoins because I feel like bitcoins give me a few benefits here and there as a consumer. But holy fuck am I cured of any anti-regulatory fantasies, and I am 100% checked out of Libertarian LaLaLand.
submitted by hendrixski to Bitcoin [link] [comments]

4/23/14 - Bitcoin into space, Atlas ATS pushes forward, & Dorian Nakamoto says thank you

Here are today's top news stories in Money & Tech:
The blockchain is headed for space. Jeff Garzik’s Dunvegan Space Systems is partnering with Deep Space Industries to build satellites called ‘BitSats’ that will be launched into space as a backup bitcoin orbital system. From orbit, these BitSats will be able to broadcast out transaction data from the blockchain to any users with a downlink. Garzik made the first payment to Deep Space Industries via BitPay, where he is also a senior software developer, and is now accepting bitcoin donations to help complete the project.
Bitcoin trading platform Atlas ATS has formed a partnership with The National Stock Exchange to speed up regulatory approval. By partnering with this self-regulatory organization, Atlas ATS hopes to bypass FinCEN's money-transmitting license in favor of SEC-approved rules that are more tailored to digital currency exchanges. Kraken and CoinMKT are also taking this route, as several exchanges race to become the first fully regulated digital currency exchange.
Nine state banking officials from the US Conference of State Bank Supervisors (CSBS), including New York Superintendent Ben Lawsky, have launched the Emerging Payments Task Force. The new task force plans to investigate bitcoin and other virtual currencies in the hopes of developing state regulation best practices, as well as more educational resources. The discussion will begin with a public hearing on May 16th in Chicago.
With the reluctance of Irish banks to accept bitcoin, ATM provider BitVendo and safe deposit box facility Merrion Vaults have partnered to provide cold storage to BitVendo's local cryptocurrency users. The service allows users to store their bitcoins safely in Merrion Vaults' high quality and secure safe deposit vault in Dublin.
Butterfly Labs has been on rocky ground since this month's lawsuit against the bitcoin mining hardware company, accusing it of collecting payments for false orders and using customer equipment for their own mining. This recent lawsuit is only the latest accusation of fraud against the Kansas-based company. What's more, co-founder Sonny Vleisides has been found in violation of his probation since pleading guilty to one count of mail fraud in 2010, which will likely extend his probation another two years.
Dorian Nakamoto, the man famously falsely identified as bitcoin's creator, has filmed a YouTube video with Andreas Antonopoulos to thank the bitcoin community for its support. Antonopoulos led a fundraising campaign for Nakamoto that raised over 47 bitcoins - worth nearly $23,000 dollars - in a new bitcoin wallet that Nakamoto says he will keep open as a new bitcoin user. Watch that YouTube video at
Bitcoin documentary The Rise and Rise of Bitcoin premieres today at the Tribeca Film Festival in New York City. Money & Tech will be attending the screening, as well as the film’s after-party hosted by Charlie Shrem. We will be bringing you video coverage and interviews from that event soon.
We will also be attending the next major digital currency event this Friday, Dogecon SF, which will be San Francisco's first dogecoin conference. The event is hosted by Follow The Coin, and will feature prominent industry speakers such as litecoin creator Charlie Lee, industry expert Andreas Antonopoulos, and of course, Dogecoin's own creator, Jackson Palmer. We sat down with Tina Hui and Matt Schlicht from Follow The Coin to talk about what we can look forward to at Dogecon SF. Find that interview here:
submitted by moneyandtech to BitcoinMarkets [link] [comments]

Building a United Platform

No matter which coin you're backing (or how many), the regulations coming out of New York State have large, overreaching and severe consequences for all cryptocurrencies.
You can read the proposed BitLicense Regulations here.
AmericanBitcoin has put together a TL;DR of the proposed reglations
In response, you can read the in-progress GitHub Fork of those same regulations here.
If you'd like to see a quick breakdown of examples of what's wrong with the proposed regulations, I highly recommend you read this comment by MrMadden over in /Bitcoin, which is utterly fantastic.
Instead of standing 'against' these regulations, let's stand for:
The problems, right now:
These regulations are vague in some important areas and could have unintended consequences.
For example, here's a great breakdown from goldcakes (originally made here)
Entities are considered dealing in virtual currencies if:
.. to any resident in New York. Web services, even those incorporated overseas, must either comply or block access for NY users. (200.2n)
Entities 'dealing in virtual currency' must:
The (only?) good news: Merchants do not need a BitLicense to accept Bitcoin for a good or service. (200.3c2).
This post was created for general guidance, and does not constitute legal advice. You should not act upon the information contained in this publication without obtaining specific advice from a professional. No representation or warranty (expressed or implied) is given as to the accuracy or completeness of the information contained in this post.
submitted by GoodShibe to CryptosUnited [link] [comments]

Upcoming Bitcoin Regulation New York

Ben Lawsky, announced his agency would be taking applications for a fully regulated New York-based exchange. no later than the end of the second quarter of 2014.
We will likely to see news this coming week!
When do we see the first US Bitcoin Exchange?
submitted by BitcoinMichi to Bitcoin [link] [comments]

Lawksy's new regulations highlight the twin futures of Cryptocurrency. Whether you advocate for surveillance or fear it, we're all getting what we want.

The more things change, the more they stay the same.
"I'm very excited about what the future could hold for this very powerful technology."
Writes BenLawsky, on bitcoin, 4 months ago in his AMA.
He also writes:
"We're hopeful that clear regulations, if done in a smart, modern way, may incentivize some of these exchanges to come ashore (hopefully here in NY)."
These are the words of a man eager to capitalize on the benefits of a new technology. Bitcoin has existed in a somewhat legal grey area, but Lawsky thinks if he can clarify a regulatory landscape then it will remove any uneasiness that interested but hesitant corporations have shown to adopting bitcoin.
In the same AMA where the word "Laundering" was mentioned 263 times, Lawsky was quick to lay out his own agenda on the issue. He's a regulator who staunchly believes that extensive KYC/AML policies will help stamp out terrorism and other forms of financial crime. Transactions need to be tracked in Lawsky's world, and he's more than willing to force the entire population to submit to that maxim in order to catch a few bad guys. He and others have been barking up the paper trail tree for a very long time, and there's nothing to suggest they will ever stop.
Regulatory clarity is an idea that makes sense on paper at least, and it will cause legitimate well-funded exchanges to spring up that submit to these extensive, and expensive, compliance checks. It will go on to cause 50 different U.S. states to create 50 different nuanced compliance schemes that each exchange will have to take into account. Such is the cost of doing business in the U.S. And yes, it will absolutely drive some business out of the US entirely and cause others to forbid american customers from participating.
It's also worth noting that Lawsky is attempting to prevent another MtGox fiasco by forcing companies that hold customers' bitcoin to provide adequate security measures, keep collateral on hand that effectively insures the deposits, and prevent them from holding any profit in bitcoin.
Bravo Mr. Lawsky. You can have your little regulated corner of the world, and the rest of us will be living in ours.
This is simply not the future of bitcoin. No one asks you for anything when downloading a wallet for yourself. No one asks for your permission, background information, or intentions when moving funds from one address to another. No one can freeze or seize the funds in an address you control. The type of rules being proposed here are the last bastion of federated economy attempting to impose control with the best of intentions. But it's exactly those intentions that will drive virtual currency usage away from government influence.
The truth is that effective money laundering control is impossible in the virtual currency world. Broad and intrusive regulation might catch some of the low hanging fruit at licensed exchanges, but users who are determined to skirt the rules can and will find ways around it, and many already have. While institutions and investors are busy sinking enormous sums of capital into the digital economy, others are busy setting up decentralized exchanges and services that fly free of regulatory scrutiny.
In Lawsky's eyes such activity might look like the golden age of piracy again, but this time it's largely a body of good actors operating under the banner of financial privacy. This is a group that is simply fed up with the big brother state. It does not trust 3rd parties, let alone their own government, to own and scrutinize their spending habits
Every modicum of value that enters the virtual currency ecosystem, even through well-regulated and compliant exchanges, increases the effectiveness of a system that operates entirely independent from this scrutiny. On a fundamental level Lawsky and I may agree that terrorism is heinous, but the days when we can trace financial transactions with any certainty are coming to a close. It's a hard pill to swallow, and it probably won't stop regulators from trying to clamp down extensively, but they're going to have to find other means to nab criminals who are engaging in harmful activities. And no, I don't mean more KYC/AML, I'll repeat this again: the more you try to push down on transaction tracking, the less effective it will be.
I firmly believe that virtual currency in some form, is here to stay, it's foolish to dismiss this. It's equally as foolish to think that all fiat currency may crumble overnight or become obsolete. Perhaps one may win over the other someday, but we're bound to see a lot of resistance to the death of either system and they will be living in tandem for a very long time. Lawsky and the regulators may claim some domain over the fiat world and transition points that convert between bitcoin and cash, but the time is quickly approaching when one is able to depart from the fiat world, and never return again.
submitted by TryAgain_NY to Bitcoin [link] [comments]

The REAL Coinbase Announcement: Coinbase sits fat and lazy atop a de facto monopoly in the US as regulators and SVB do nothing to ensure level playing field; meanwhile Bitcoin adoption suffers, and US citizens and bitcoin innovation pay the price.

The ONLY reason Coinbase is where they are is due to a cozy relationship with Silicon Valley Bank (SVB), by way of a certain board member. This cozy relationship gives them full US banking privileges care of SVB, which conveniently refuses to bank other bitcoin businesses. No other Bitcoin business (especially other exchanges) has achieved that privilege despite enormous attempts with HUNDREDS of other US banks. Not one bank besides SVB will bank a bitcoin business. Does this not smell?
If a bitcoin business can’t get a US bank to accept customer ACH or Wire deposits and withdrawals, then that bitcoin business can’t serve the US market. Coinbase is the ONLY firm that has held this privilege and continues to do so.
It would be one thing to cheer CEO Brian Armstrong and Coinbase for raising $75MM if they did it amidst a free market, where they won out among competition. Yet their recent fundraise is 100% care of their unfair monopoly privilege. This is supposed to be a free and open democracy. It smells more like Putin’s Russia.
US Regulators - Ben Lawsky, et al - meanwhile do nothing to ensure a level playing field, either by shutting down the banking relationship pending equal access for all, or by granting banks the requisite confidence to accept Bitcoin business without threat of penalty, either via some grace period, or by establishing even preliminary rules. Lawsky seems to be more interested in putting a nice capstone on his NYDFS career than in making sure there is a level and fair playing field for everyone as soon as possible.
SVB should be ashamed of itself for stifling innovation and competition. It should either bank other bitcoin startups or bank none at all!
submitted by btcdemocracy to Bitcoin [link] [comments]

A Non-technical Bitcoin Primer (Part 2)

This is a continuation of Part 1.
PSEUDONYMITY Unlike credit card transactions, in which you give your name, Bitcoin transactions are pseudonymous (a pseudonym being an identifier other than your real name). Instead of having your name on your account, you have a public key, which is just a sequence of letters and numbers, like the one below.
That's your pseudonym.
People who are concerned with privacy view this as an advantage, since it enables you to make payments without revealing your identity.
Critics worry that this system facilitates crime, and proponents counter that cash is much better for criminals. Why?
Your account may be represented by some random sequence, instead of your name, but all Bitcoin transactions that have ever occurred are available for scrutiny on a public ledger called the blockchain. This data opens up the possibility of investigative methods to which cash is not susceptible.
Also, those who are concerned about criminals may be missing the point. It's sort of like censors in the mid-twentieth century who hadn't conceived of the World Wide Web (preventing kids from being exposed to profanity these days is a bit more difficult, to say the least).
The thing they're missing is that Bitcoin is only one of many cryptocurrencies, and others (such as zerocoin) are being developed that will provide much greater privacy.
File sharing on the internet is another example of how those seeking to overregulate Bitcoin might be missing the point. Early on, we had Napster, which was shut down due to concerns over copyright infringement. The effect of this shutdown appears to have been essentially the opposite of the intended effect. Instead of stopping illegal file sharing, it accelerated the development of file-sharing technologies that were even more difficult to stop. Since demand still existed, Kazaa came to the fore, and now we have BitTorrent.
It's "hard to put the genie back in the bottle," as Ben Lawsky, New York's Superintendent of Financial Services, has pointed out. When it comes to reducing crime, overregulation of Bitcoin could lead to an increased resistance to law-enforcement efforts, as we saw with file-sharing, while at the same time taking away from its many benefits.
THREATS TO BITCOIN'S SUCCESS When evaluating Bitcoin's chances for success or trying to understand price fluctuations, it's important to keep several key issues in mind.
ADOPTION Both merchant and consumer adoption are important, and both have been growing.
On the merchant side, we now have large reputable companies accepting Bitcoin, such as, Expedia, and Dish Network. See, for example, the list of companies working with Coinbase.
On the consumer side, one way to track growth is to look at the number of bitcoin wallets (wallets are to Bitcoin what accounts are to the traditional banking system). This number has also been growing steadily.
The website is one place to track such things.
Another interesting thing to watch will be the MIT Bitcoin Giveaway, in which $100 in bitcoins will be given to every MIT undergraduate in the fall 2014 semester.
ROBUSTNESS OF THE TECHNOLOGY One possible threat is that some kind of bug or design flaw will cause the system to crash. The technology has been around since 2009, and Bitcoin has been resilient so far. For example, it survived a distributed denial of service attack early this year.
There are a number of design issues to consider, such as scalability, mining centralization, and so forth, but there are a lot of people working on these issues. In fact, Bitcoin is considered by some to be supported by the largest research and development community in the world. Something like 10,000 of the smartest people in the world are working on issues such as scalability and user-friendliness.
COMPETING TECHNOLOGIES There is a chance that another technology that is superior to Bitcoin will emerge to kill it. At present, however, Bitcoin is the clear leader among cryptocurrencies, and it becomes more difficult to overtake as time passes, due to the network effect.
Already, Bitcoin is supported by a massive amount of infrastructure, in the form of mining equipment, exchanges, startup companies backed by venture capitalists like Andreessen Horowitz, software applications, and so forth.
REGULATION There is some chance that governments could slow the growth of the Bitcoin economy, for example by issuing regulations that make it difficult for exchanges to operate.
Regulations in China led to a sharp decrease in the price for a time. Many governments have reacted more favorably. In the U.S., the regulatory outlook has been improving. We've seen increased clarity from the IRS and are expecting favorable regulations to come out of New York sometime this month, which may make it easier for exchanges to get established in New York. This could lead to more liquidity and would reduce the risk of shock from one exchange going down.
Moreover, the U.S. just sold about 18 million dollars' worth of seized bitcoins in an auction, which provides additional legitimacy to the currency.
A FINAL NOTE: SOCIAL AND POLITICAL RAMIFICATIONS For better or worse, one thing large-scale technologies seem to have in common is their unpredictability. Who would have predicted that a social media platform called Twitter with a cute little bird logo would end up facilitating political revolutions throughout the Arab world?
FURTHER RESOURCES This article by Marc Andreessen gives a good overview.
A nice way to get started is also to just check out bitcoin regularly. The users here range from noobs to developers and Bitcoin entrepreneurs. So, you’ll see more technical talk and in depth discussion than you see in typical media stories, and you can ask if you don’t understand.
You can also try the Bitcoin 101 Blackboard Series, which I hear is quite good.
For a quick video on the technical aspects of Bitcoin, you can try the video Bitcoin Under the Hood or the shorter, less technical version of this video.
For another explanation of the technical underpinnings, you might try the Khan Academy videos.
If you're looking to purchase your first bitcoin, then depending on where in the world you live, you might consider getting started with Coinbase. It's reputable and very easy to use. Many people will advise you not to store your coins on a web wallet, but buying a few coins (or a fraction of a coin) on Coinbase is a good way to start as a beginner. Please be aware, though, that this is a new industry and purchasing Bitcoin in any form carries risk, so do your research. I wouldn't want to be the one recommending Coinbase just before someone manages to hack it!
I hope that helps!
Edit: formatting and typos; added quote from Ben Lawsky.
submitted by 11251442132 to Bitcoin [link] [comments]

Ben Lawsky's BitLicense could cost New York Jobs The Bitcoin Group #69 - BitFinex Hacked, Lawsky Steps Down, Block Size & Wall Street Bitcoin Ben Lawsky releases BitLicense at the BITS Emerging Payments Forum (full video) Charles Hoskinson on Ben Lawsky and Ripple The Bitcoin Group #18 (Live) - Mt. Gox (part III ...

Earlier today, New York Department of Financial Services (NYDFS) superintendent Ben Lawsky participated in a Bitcoin-themed Ask Me Anything (AMA) on Reddit, offering a window into the state’s plans for future regulation of the cryptocurrency.Lawsky made headlines last week after sketching out a regulatory framework that would include a “BitLicense” for those doing business in virtual ... On Bitcoin regulations he would like to see put in place, Ben Lawsky said: “We’d like to see consumer protection. So when people entrust their money to a bitcoin wallet or a bitcoin exchange or another service, that we don’t have a situation like we had in Japan last year with Mt. Gox…We want to see sufficient cyber security to prevent terrible hacking, and we want to see enough ... Ben Lawsky, Superintendent of the Department Financial Services (DFS) for the State of New York, has been highly active in taking up the cause of virtual currency, reaching out to its community and exploring ways of bringing it into a regulatory framework to protect consumers. Last month, he held hearings on the future of virtual … Continued Ben Lawsky from New York’s Department of Financial Services made headlines yesterday after outlining his state’s plan for regulating Bitcoin, but his other comments about the cryptocurrency that may be more interesting. Speaking at Future Tense in Washington, DC, Lawksy weighed in on the recent price drops caused by the “transaction malleability” glitch. “I think […] NYDFS superintendent Ben Lawsky will be keynoting at the Money 20/20 conference in Las Vegas in November.

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Ben Lawsky's BitLicense could cost New York Jobs

Ben Lawsky of the New York Department of Financial Services NYDFS has proposed some very onerous and extreme regulations surrounding Bitcoin which amount to essentially a ban on ideas, technology ... Live Bitcoin Liquidation Watch: June 1 2020 IntroToCryptos 206 watching Live now Kayleigh McEnany explains what it will take to stop antifa - Duration: 7:26. Cowboyminers Bitcoin mining farm goes up in flames, losing $3.6M worth of equipment. Cybernetic organism, Mr Chris Ellis creates a Decentralised Passport called BlockchainID. Ben Lawsky is feeling ... This video is unavailable. Watch Queue Queue. Watch Queue Queue Arnold Schwarzenegger This Speech Broke The Internet AND Most Inspiring Speech- It Changed My Life. - Duration: 14:58. Alpha Leaders Productions Recommended for you