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The Superintendent of Financial Services at the New York State Department of Financial Services, Mr. Ben Lawsky, has publicly released the highly-awaiting BitLicense regulation proposals that come as a result of hearings that took place earlier this year.
The push came via the Bitcoin page on social sharing website Reddit.com as a means to connect with one of the largest online digital currency communities.
According to Lawsky, the drafted proposal will make its was to the New York State Register on the 23rd of July, which will commence a public commenting period of forty-five days. Following the commenting and period of scrutiny, the proposals will be “subject to additional review” and potentially revised, depending on the circumstances.
“In developing this regulatory framework, we have sought to strike an appropriate balance that helps protect consumers and root out illegal activity – without stifling beneficial innovation. These regulations include provisions to help safeguard customer assets, protect against cyber hacking, and prevent the abuse of virtual currencies for illegal activity, such as money laundering,” Lawsky wrote.
He continues:
[blockquote style=”2″]We recognize that not everyone in the virtual currency community will be pleased about the prospect of a new regulatory framework. Ultimately, though, we believe that setting up common sense rules of the road is vital to the long-term future of the virtual currency industry, as well as the safety and soundness of customer assets. (We think the situation at Mt. Gox, for example, made that very clear.) Moreover, given that states have specific regulatory responsibilities in this area, we also have a legal obligation to move forward on this framework.[/blockquote]
A copy of the proposal is made available here [link], and we’ve embedded it below for your review.
NYDFS Bitcoin Regulation Proposal
The forty-page proposal covers everything from compliance (which is a given), books and records, disclosures, anti-money laundering and cyber security programs, and even advertising and marketing.
It will be interesting to see what members of the community, particular those who do business in the State of New York have to say about the proposal.
bouf 
your _link_ to the NY website is not correct, methinks
Nice work in beating a certain other news outlet to the punch on this story! Go newsbtc!
As for the proposed reg, get ready to pay plenty of that fiat for a financial law attorney to
interpret some of these sections for you. Also note the requirement for
approved auditors. (Meaning someone’s uncle’s company(ies) stands to start
charging you rent as well.) _OF COURSE_ there is an application fee; wondering that the amount of that fee is not noted.
Perhaps the most interesting part is Sec 200-8. (b)
“(b)Each Licensee shall be permitted to invest its retained earnings and profits in only the following high-
quality, investment-grade permissible investments with maturities of up to one year and denominated in United
States dollars:
(1)certificates of deposit issued by financial institutions that are regulated by a United States federal or
state regulatory agency;
(2) money market funds;
(3) state or municipal bonds;
(4) United States government securities; or
(5) United States government agency securities.”
Love the term “permitted to invest” – how do you like that? From this language it seems that the owner / operators of these licensed permittees will not be allowed to retain earnings or profits in BTC. In other words, all your profits have to go straight on to the books in their fiat-demoninated quantity. If you want to buy BTC with your declared and tax-adjusted business profit fiat that will be fine with the state of NY, but you have to declare ALL the profits in $$$. Just holding onto the BTC as a re-investment in the corporation (a non-taxable event normally) will not be allowed. My reading…. What say you?