Category Archives: BitLicense

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2020 Democratic Presidential Candidate Andrew Yang Hits Out at BitLicense

2020 Democratic Presidential Candidate Andrew Yang Hits Out at BitLicense

Pro-Bitcoin Presidential Candidate Andrew Yang is calling for more clarity in regulating cryptocurrencies slamming BitLicence as “onerous”.

BitLicence, the business license of virtual currency activities issued by the New York State Department of Financial Services, has again come under fire in the 2020 Democratic presidential candidate’s latest comments.

Yang is an American entrepreneur, philanthropist and the founder of Venture for America. He worked in startups and early-stage growth companies as a founder or executive from 2000 to 2009. He is one of the few presidential candidates in history to accept crypto donations.

One of the concerning factors of BitLicence that many exchanges cite is its dictatorial approach to regulating the market, even to the extent of instructing exchanges exactly which cryptocurrencies they are permitted to trade. When the BitLicense was first enacted at least ten major cryptocurrency companies shuttered their doors to New York customers, and some people have called this the Great Bitcoin Exodus. Ripple gained their license in 2016 and Coinbase in 2017.

Yang is pushing for much clearer regulation, a well-trodden path by many industry players, arguing that has the US will fall behind due to conflicting regulation measures and such introductions as the Token Taxonomy Act, pointing to Wyoming as a beacon of sensible legislation regarding cryptocurrency. He said:

“It’s time for the federal government to create clear guidelines as to how cryptocurrencies/digital asset markets will be treated and regulated so that investment can proceed with all relevant information.”

Wyoming continues to build legislative bridges between the cryptocurrency system, its underlying blockchain technology, and legacy financial laws of the state. Efforts so far have been channeled towards innovation and improved economic activities of digital assets. Its most recent bill aims to identify and classify digital assets into three categories: digital consumer assets, digital securities, and virtual currency.

The bill mentioned that virtual currency is “intangible personal property and shall be considered money”.


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Kraken Ex-Manager Suing Exchange Over $900,000 Alleged Unpaid Commission

Kraken Ex-Manager Suing Exchange Over 0,000 Alleged Unpaid Commission

An ex-employee is suing cryptocurrency exchange Kraken, the world’s largest bitcoin exchange in euro volume and liquidity

Jonathan Silverman, who was previously employed by the company’s trading desk in New York claims he is still owed a commission on USD 19 million profits accrued over three months in 2017. The commission still owed, amounting to 10%, is over USD 900,000, claims Silverman.

At the time, the company’s founder Jesse Powell is said to have offered the trading desk manager a salary of USD 150,000 with a verbal agreement of 10% commission of the trading desk’s annual profit, according to the suit filed in New York on 4 April.

Christiana Vee, a spokesman for Kraken, was clearly highly skeptical of the claim, suggesting that Silverman “is both lying and in breach of his confidentiality agreement”. Founder Powell himself is not unused to friction, once attacking the New York Attorney General after being asked for more information about the exchange, suggesting that that “most crypto traders” aren’t concerned about “being protected from market manipulation” even though “scams are rampant”.

Clearly unhappy with New York’s regulators, Powell tweeted last year, We made the wise decision to get the hell out of New York three years ago”. The company made a farewell statement which was attacked New York’s BitLicense, introduced by the Department of Financial Services.

“Regrettably, the abominable BitLicense has awakened. It is a creature so foul, so cruel that not even Kraken possesses the courage or strength to face its nasty, big, pointy teeth.”

David Silver, representing Silverman and his claim for restoration over the alleged missing commission, prewarned Kraken in comments made in an emailed statement, arguing: “Just because some people in the cryptocurrency space don’t believe the rules apply to them doesn’t mean that’s the way things actually work.”

The lawsuit argues that Kraken “refused” to pay out the lump sum settlement of USD 907,631, despite the agreement.


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Canada’s Lawmakers Seek AML Regulations for Exchanges, Wallets

Canadian lawmakers are calling for tighter cryptocurrency regulations to cover anti-money-laundering (AML) and illegal activity.

Canada’s move towards further cryptocurrency regulation and transparency reflects the growing trend with governments around the world to tighten the regulatory grip on the industry. The US Securities and Exchanges Commission (SEC) has been particularly active this year in tracking down and prosecuting fraudulent cryptocurrency exchange activity.

The new calls for AML laws follow on from plans for heightened scrutiny of cryptocurrency exchanges, as announced by the Ontario Securities Commission (OSC) earlier this year due to the increase of digital currencies on the market, some of them less reputable than others.

The three new measures were proposed from the House of Commons Standing Committee on Finance (FINA); they include closer monitoring of both cryptocurrency exchanges and wallets. Added to this, MPs are calling for crypto-to-fiat exchanges to be registered as money services businesses, placing exchanges under Financial Transactions and Reports Analysis Centre (FINTRAC) supervision. FINTRAC is Canada’s federal agency for the monitoring of AML and counter-terrorist financing.

The current concern among legislators is that cryptocurrency is used for the financing of illegal activity, a common concern amongst legislators globally. It is an argument which has less traction these days after the results of numerous surveys illustrating that fiat currency is still the preferred financial tool behind organized-crime and terrorist activity. FINA’s proposal suggests:

“Law enforcement bodies must be able to properly identify and track illegal crypto-wallet hacking and failures to report capital gains.”

The government regulatory body also recommends the foundation of a licensing regime similar to that of New York State, whose BitLicense covers financial regulatory issues, independent of FinCEN rules. The Financial Crimes Enforcement Network is a bureau of the United States Department of the Treasury that collects and analyzes information about financial transactions in order to combat domestic and international money laundering, terrorist financing, and other financial crimes.

A decision is yet to be made whether such a bureau should operate on a local level across Canada’s ten provinces or should be overseen by a federal regulator.

The Blockchain Association of Canada is not happy with the new proposals, suggesting that rather than take unilateral action, government authorities should cooperate with cryptocurrency exchanges in detecting any criminal activity.


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Coinsource is First Bitcoin ATM Operator with New York Bitlicense

Coinsource, a Texas-based firm with 192 Bitcoin ATMs across the United States, has become the first Bitcoin ATM operator to receive the New York Bitlicense. The company had previously been operating 40 Bitcoin ATMs under a provisional license in New York City, Westchester and Long Island.

Genesis Coin also operates numerous Bitcoin ATMs in New York but is still awaiting approval from the New York Department of Financial Services.

The CEO of Coinsource, Sheffield Clark, said, “Coinsource is the first and only company that operates BTMs [Bitcoin ATMs] to receive a New York virtual currency license. All New Yorkers — from the people that are unbanked to the people who own the banks — can use our kiosks in their neighborhood retail locations to buy bitcoin instantly in a convenient and familiar way. Now that Coinsource is a license holder, our customers can buy and sell with confidence that Coinsource meets and exceeds the high standards set by the New York Department of Financial Services. New York represents not just a center of global innovation but also one of our largest target markets. We are extremely proud to be the only BTM operator holding a New York virtual currency license.”

The New York Bitlicense is difficult to obtain and has been controversial since it was implemented in August 2015. Any individual or organization that buys or sells cryptocurrency as a customer business, performs exchange services, controls or issues a cryptocurrency, or stores cryptocurrency on behalf of others is breaking the law unless they have the Bitlicense.

For a period of time, this caused Bitcoin trading in New York to become illegal and to this day, Bitcoin dealing is illegal in New York. In 2017, that problem was alleviated when Coinbase got the Bitlicense. At this time, only 12 companies have received charters or Bitlicenses to operate in New York, including Circle, Ripple, bitFlyer, Coinbase, Genesis Global Trading, BitPay, Square, and Coinsource. Essentially, only the wealthiest and most reputable companies have been able to obtain the Bitlicense. Smaller companies and individuals have not had success applying for the same rights to operate cryptocurrency businesses in New York.

Coinsource’s Bitlicense can be revoked at any time if owners do not follow strict anti-money laundering (AML) protocols, take active steps to prevent the Bitcoin they sell from being used for illegal activity or market manipulation, allow the New York Department of Financial Services to fully monitor their business activities, and properly protect consumers and resolve all customer complaints.


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North America: Crypto and Blockchain News Roundup, 18th to 24th May 2018

North America

Welcome to our weekly roundup of all important blockchain and cryptocurrency news from around the world. Follow the latest developments in the cryptocurrency space continent by continent, country by country.

United States

Department of Justice opens investigations into Bitcoin price manipulations: The US Department of Justice has launched a criminal investigation into the currency manipulation of Bitcoin and other cryptocurrencies.

The DOJ’s notable concern was that the volatility of the market comes with a suspected potential for investors and traders to influence price in their favor. In addition to price manipulation, DOJ is also looking at fraudulent activity due to lack of regulation.

Former Obama advisor attacked with anti-Bitcoin adverts: Ex-Obama advisor Brian Forde is being attacked for accepting donations in Bitcoin by Dave Min, a rival Democrat competing for a seat in the House of Representatives. The move comes despite the Federal Election Commission ruling that allowed donations to be received in Bitcoin.

The ad targeted Forde for being associated with hackers and malicious activities. In response, Forde said:

“These comments about my supporters are sensationalist, wildly inaccurate, and in line with my opponent’s lack of understanding of the technology… If they were speculating, they wouldn’t have donated to my campaign in Bitcoin. They didn’t HODL, they donated to my campaign in Bitcoin because they believe in the technology.”

Bitcoin Pizza transaction now worth $80 million: The Laszlo Hanyecz story is a legend in Bitcoin world as the person purchased two large pizzas in 2010 with BTC 10,000. Now, after eight years, the Bitcoins are worth USD 80 million and increasing every year.

The legendary story is seen as a missed opportunity for HODL and the first instance in which a major company accepted payment in Bitcoin. Hanyecz had mined the Bitcoins on his personal computer. On 23 May or Bitcoin Pizza Day, the crypto world looks back at how far it has come from BTC 10,000 for two large pizza eras.

Walmart integrating blockchain to Help with Sales: American retail giant Walmart has filed a patent for an application with the US Patent and Trademark Office for a sales platform that uses blockchain technology. The platform was designed by Donald R High, Michael D Atchley, and Chandrashekar Natarajan.

This is a big milestone for the future development of blockchain startups as Walmart is one of the biggest companies in the world with 11,700 stores in 28 countries. The application allows users to re-sell products from Walmart using blockchain as proof of authenticity.

Federal Trade Commission holds workshop for ICO Scams: The US Federal Trade Commission (FTC) will host a cryptocurrency workshop to address the considerable challenges that ICOs pose for investor security because of the possibility of scams. The conference called Decrypting Cryptocurrency Scams will comprise law enforcement, research organizations and consumer groups in the space.

The conference will allow the FTC to make new protections for consumers in the future by getting their feedback.

Warren Buffet taunted for his anti-Bitcoin views: Warren Buffet’s anti-Bitcoin views are universally disliked in the cryptocurrency space and Genesis Mining, a mining company purchased a billboard sign right outside his office to taunt him on his views on Bitcoin.

It reads: “Warren: you said you were wrong about Google and Amazon. Maybe you’re wrong about Bitcoin?”

Buffet’s dislike for new tech is obvious but he is the third richest man in the world due to his successful investments in conventional enterprises including banking and stocks.

Only 5 companies holding BitLicense in New York: New York’s notorious BitLicense has resulted in only five cryptocurrency exchanges operating in the city. The grand total only got to five recently when the New York Department of Financial Services gave a new license to Genesis Global Trading Inc.

Stringent BitLicense policies include AML, KYC, anti-fraud and cyber security measures but it is widely seen as a roadblock for further development of cryptocurrencies.


Unlicensed crypto trader jailed: An unlicensed Canadian crypto trader was jailed in the US after admitting undercover federal agents that he was trading in Bitcoin.

Louis Ong, a trader from Vancouver has received a 20-day sentence in the US after running an unlicensed cryptocurrency trading platform. Ong also had to forfeit over USD 1.1 million worth of Bitcoin to the investigators and was given three years of supervised release.

Ong claims that it wasn’t his intention to break the law and most of the trading he did was on legal channels.

Sweeping operation launched by US and Canada: US and Canadian governments launched investigations into 70 suspect ICOs and cryptocurrency scams in a wide-ranging operation called ‘Crypto Sweep’.

The operation by the combined North American Securities Administrators Association (NASAA) was termed only as “the tip of the iceberg” by the association by the president Joseph Borg.

Marshall Islands

Government breaks away from US Dollar and launches crypto: The Marshall Islands are looking to break away from the US Dollar and launch their own cryptocurrency called Sovereign.

The tiny Pacific nation is in free association with the US but is now looking for greater economic independence. The government has already signed the move into a new law.


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