The NY regulators or the New York State Department of Financial Services (NY DFS), is seeming helpful and promoting the concept of cryptocurrencies in the mainstream comparing to other nations who are still trading waters and unable to opt any path.
Earlier, in June 2015, the NY regulators circulated its virtual currency regulation (23 NYCRR Part 200 (the “VC Regulation” or “BitLicense” regulation)) to provide more regulatory clarity and efficiency among the cryptocurrency businesses.
Reportedly, BitLicense is a business license or authority to run a crypto-focused business/marketplace in New York. The license defines the rules and regulations for the companies operating with crypto assets including the management and administrative policies.
Though, the efforts of NY regulators had to meet the criticism from the public due to the strict policies and complexity.
During the time, only 25 virtual currency licenses and charters were granted to the companies who followed the norms and guidelines. However, other firms were not able to get the ticket due to strong regulatory requirements and unavailable resources.
Almost after five years, on June 24, 2020, after analyzing the controversial state of BitLicense, the NY DFS has issued the “Conditional BitLicense” framework to restructure the old standards which were earlier issued without taking comments from the public.
As per the information, the NY regulators (NY DFS) has proposed few guidelines and new approach while serving the small businesses and growth-stage companies focusing on the cryptocurrency industry.
New Framework for New Entrants by NY Regulators
The New York State Department of Financial Services (NY DFS), has mentioned in the latest circulation about the updated framework and allowed the new entrants to collaborate with an existing and authorized BitLicensee or a holder of a New York limited purpose trust charter.
As officially mentioned, while collaborating with the existing BitLicense holders the aspiring applicants of BitLicense can take their support to meet the various guidelines relating to systems, structure, capital, and personnel requisites.
While detailing further, the DFS mentioned certain rules for the applicants which they have to comply with, in the process of collaborating with the existing BitLicense holders. The aspiring candidates must inform the DFS about their intention to seek cooperation with the existing license owners and must come in the service level agreement with a license holder.
Also, the applicants are required to submit the documents mentioning their intending business and the associated risk with it. After, submission of the preconditioned documents, the applicants would enter into a supervisory agreement with DFS.
Hence, once the standard practice completes, the applicant would be eligible for the “Conditional BitLicense” from the NY regulators.
The DFS is expecting the amendments to BitLicense may help the smaller companies to be regulated and help the nation to be technologically ahead of other nations.
This time, under the new framework, the New York Department of Financial Services asking for the feedback and comments until August 10, from the stakeholders while catering to the public interest and avoiding earlier slip-ups which aroused controversies and commotion among the up and coming new cryptocurrency ventures.
The questions are on the website under “request for comment” caption.