In New York, the national assembly has passed a bill to accommodate a more conducive environment for virtual currency trade. The main intentions of the draft are to protect virtual currency business dealings and restrict licensing fees. In addition to a licensing regime based on audits, its sponsor wants to change the expensive Bitlicense regulations. While encouraging the development of the virtual currency sector, the main objective is to safeguard speculators.
The Digital Seal Announced
The New York’s banking law will be amended by Assembly Bill A09899 if adopted. A new mechanism based on independent audits will replace the current licensing regime, in an effort to safeguard investors and instill confidence in clients. The private individual(s) or corporate entity(ies) who are involved in virtual related business activity will be required to be audited by a public or private third party depository service based on the new §9-x section law.
Additionally, Auditors must confirm that persons and companies involved in virtual currency related activities are in possession of security protocols to protect them from embezzlement, hence promoting local confidence. Moreover, they should validate if the virtual companies uphold a fund safeguarding a part of their account holders’ investment “by the Securities Investor Protection Corporation or another authenticated insurer.”
In an attempt to ensure the proper ownership of assets, third parties are expected.
The draft explicitly details that “Notwithstanding any other law, rule or regulation, no person, corporation, partnership or other entity that conducts cryptocurrency business activity shall be required to pay a licensing fee.”
This also suggests that firms that are in complete submission in regards to the regulation will get a digital New York State seal of approval.
On one hand the amendments are intended to safeguard virtual currency investors and on the other hand, lessen the bureaucratic and regulatory loads on virtual currency businesses. Numerous Legislators form co-sponsor of the bill but mainly Ron Kim (D) introduced Bill A09899. Last month, the bill has been denoted to the NY state assembly committee on Banks.
The phrase “cryptocurrency business activity” is comprised of acquiring and sending virtual currencies, according to the draft. In addition, this definition also includes the holding, maintaining and storing control or ownership of virtual currency on behalf of another individual (s) or corporations.
Nevertheless, it does not cover , “transactions undertaken for non-financial purposes” also referred to as “nominal amount of cryptocurrency”.
Controlling, administering and even issuing coins are entail in the legal paper, as well as trading in virtual currency and undertaken exchange services. According to the contributors, with regards to virtual currencies, to regulate the generation of units and verification of transfer of funds, an encryption technique is utilized which in essence independently forms a central bank.