BitLicense Applications Still Await Reply After NYDFS’s Approach Is Deemed “An Absolute Failure”
BitLicense Applications Still Waiting For A Reply, After NYDFS’s Approach Is Deemed “An Absolute Failure”
The New York Department of Financial Services has been innovative in their approach to cryptocurrency regulations. They are one of the few states that has set up their own market, and any business for cryptocurrency is required to obtain a BitLicense through an application to the department. However, based on data provided by the NYDFS, there have only been responses to 9 BitLicense applications since 2015, even though there are 36 applications on record.
Robert Hackett, a writer with Fortune, recently reviewed a speech with Erik Voorhees, which criticized the pace that the department has taken so far. At this point, over the last three years, there are only four companies with approval, making the effort “an absolute failure,” rather than the success it could’ve been.
Since the comments at the 2018 Consensus Conference in May, six more applications have been approved, so it is possible that the negative comments have helped to push the authority along. Multiple other companies have already chosen to forgo doing business in New York, rather than taking the time to fill out the requests to keep their current activity moving along. Kraken was one of the many companies to leave, but not before making some bold comments about the circumstances.
New York State should be thriving in this endeavor, but it is failing still. With one of the highest populations in the United States, and as the home of Walls Street, the point of BitLicense was to help with the progress of blockchain’s industry, but it has instead slowed the pace significantly. Right now, with all of the other policies and tax regulations that companies have to worry about, the BitLicense may just be too much work for businesses.
According to the Bloomberg report, this pace should bring in another 12 Bitcoin business approvals by NYDFS in 2019, but there are no guarantees. In fact, there isn’t even an explanation on why the process is taking so long in the first place. The slowness has even led Ben Lawsky, the architect of the process, to leave and join Ripple’s work instead.
The entirety of a business’s structure could easily be ruined by other policies before it is even approved for the BitLicense, which means it isn’t a compliant or welcoming place for cryptocurrency exchanges to flourish. The irony here lies in the fact that the inefficiencies of the government could be remedied by the very blockchain projects that they are taking so long to approve.