Stop the BitLicense
New York Wants Bitcoin Services to Spy on Users
The State of New York is proposing a "BitLicense" for people creating and innovating around virtual currencies like Bitcoin. It’s bad news for privacy and free speech. But we have a chance to change the proposal or even stop it altogether. Send a letter to the New York Department of Financial Services today.
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What the proposal would do:
- BitLicense requires Bitcoin innovators to get a license. Just to get a license, you would need to undergo a background check and submit your fingerprints to state and federal law enforcement.
- Even technology users just dabbling in Bitcoin could be affected. All the companies who obtain a BitLicense may be forced to collect personal data on consumers – including full name and physical address – and keep that data for 10 years, no matter how small the transaction. Basically, it may force companies to spy on users and keep identity data for a decade, just in case the government wants to look at the information later.
Virtual currencies like Bitcoin have the potential to be privacy-protective and censorship-resistant, but the proposal from New York could undermine all of that. New York is pushing this regulatory framework under the guise of combatting money laundering, but it will affect everyday users and small businesses that have done nothing wrong. Perhaps worst of all, it could stifle a fledgling privacy-enhancing industry before we even know what virtual currencies could help launch.
Help us stop the BitLicense. Send in comments today using the suggested text to the right or by emailing email@example.com.
Dear Superintendent Lawsky and General Counsel Syracuse,
I’m writing you today to express my deep concerns about the “BitLicense” proposal. The current framework threatens the privacy of virtual currency users, innovators, and researchers. In particular:
- The BitLicense is extremely broad, requiring licenses for far more than just money services.
- It infringes on the privacy rights of individual users. Companies that obtain a BitLicense could be forced to collect identifying data on account holders and end users including full name and physical address. This information will be kept on file for 10 years in case the government seeks it. So while individual users may not need a BitLicense, their privacy will be seriously affected.
- It forces virtual currency innovators to undergo rigorous background checks and submit fingerprints to state and federal law enforcement. This will create a barrier to entry for start ups and inventors looking to create new services.
- The proposal as written raises First Amendment concerns.
It’s premature to craft regulations for an industry that’s so new and still in flux. Bitcoin and similar virtual currencies are still in their infancy, and we don’t yet know what new tools and services might be created. This regulatory proposal could cut that innovation off at the knees, before we have a chance to see the potential societal benefits.
The NY DFS is letting the fear of money laundering drive a massive regulatory proposal forward that would affect users who are doing nothing wrong. NY DFS should respect the privacy of technology users, and limit its regulation to what is proportionate to the real threat at hand.