For those who have been following the developments in cryptocurrency sector from past couple of years, the BitLicense fiasco is quite familiar. The cryptocurrency industry was in for a shock last year after the New York Department of Financial Services decided to implement regulations governing digital currencies, popularly referred to as BitLicense. With BitLicense coming into effect, companies in the sector either decided to comply with the regulations and apply for the required licenses or move out of the State of New York.
Either the basis of implementation of BitLicense or its validity was never questioned, until now. Theo Chino, promoter of a Bitcoin based business in New York State has decided to find some answers regarding BitLicense after New York Department of Financial Services failed to issue BitLicense for his business, which involved selling phone minutes for Bitcoin. With the department saying his business can’t be classified as a digital currency processing business, Chino was forced to shut down his business due to regulatory uncertainty.
In order to get some clarity on the situation and to protect the interests of “Bitcoiners”, Theo Chino has filed a lawsuit against the Department of Financial Services — New York State and Anthony J Albanese — in his official capacity as the acting Superintendent of the Department of Financial Services. The lawsuit, filed in the Supreme Court of the State of New York falls under Article 78 — against the executive branch overreach, blaming NYDFS for acting arbitrarily and inappropriately while implementing BitLicense.
The lawsuit claims, “the Department of Financial Services acted arbitrarily, inappropriately used bitcoiners as “guinea pigs” when it promulgated its virtual currency regulation.”
Theo Chino is arguing that the implementation of BitLicense goes beyond the scope of statutory authority of NYDFS which has led to personal losses and also caused Bitcoin technology startups to move out of New York state. He also presents proof where Benjamin Lawsky, the former Superintendent of NYDFS responsible for BitLicense acknowledging the intention behind BitLicense was to test the use of unauthorized regulatory power on traditionally regulated financial institutions and not as a genuine response to an objective need.
Chino was quoted in a press release published by his attorney Pierre Ciric of Ciric Law Firm PLLC;
“It is appalling that the former head of the Department admitted that his ultimate goal was to use the bitcoin com- munity as “guinea pigs” to test new rules for the banks, which the legislature never authorized. This may be a game for Mr. Lawsky, but his inappropriate behavior has real life consequences. Because of this regulation, I am no longer able to pursue the expansion of my business, which I have to close as a consequence. This is why I am seeking the help of the judiciary branch, to tell these regulators they cannot play around with “people’s” lives and investments, and to stop them from using us as his toys,”
The whole cryptocurrency and financial community will be closely following the case — Chino v. Dept. of Financial Services, Claim # 124835, Index # 101880-15 which will be heard by Judge Lucy Billings. Detailed information and court filings are available at – Article 78 Against NYDFS website.
Ref: Article78AgainstNYDFS | Reddit | Press Release | Image: NewsBTC