BitLicense Approval Shines Fresh Light On New York-Crypto Relationship

The recent approval of Genesis Global Trading's BitLicense application has shone fresh light on New York State's relationship with the cryptocurrency industry.

Although New York is historically a business-friendly center and international financial hub, many industry players have criticized the regulatory requirements enforced by the New York State Department of Financial Services through the BitLicense since its release date in 2015.Most of these criticisms were confirmed in a round table held earlier this year by New York State senators Jesse Hamilton and David Carlucci, who invited cryptocurrency companies to raise their concerns about the BitLicense.

The BitLicense became effective in New York on June 24, 2015 but in the three years since then, only five crypto-related companies have been approved for a BitLicense in the state.

The Bit-exodusSince its release, the strenuous requirements of the BitLicense have forced many crypto startups to leave New York, in a movement that's been dubbed the Bit-exodus.

Jesse Powell, founder and CEO of Kraken, a Bitcoin exchange, explained why his company decided to leave New York."There were some things about it that were just untenable having to disclose all the information about your global client base to the state of New York - we just couldn't live with."

How is it affecting New York's cryptocurrency opportunities?The Consensus 2018 panel agreed that New York is the financial capital of the world but the blockchain community is international, and ultimately that the enforcement of the BitLicense is more harmful to the state than it is for the international cryptocurrency community.

Support for crypto even showed up in the NY fashion week and at one point New York was named as the second most Bitcoin-friendly city in America.

Although Genesis's BitLicense application approval is a step in the right direction, the consensus is that the BitLicence process has all but destroyed the New York-crypto relationship and has been bad for innovation and business as a whole.

Earlier this year, New York State Assembly legislator, Ron Kim, proposed a bill to effectively replace the BitLicense process, relaxing regulatory requirements and entice crypto investors back into the Empire State.

The current bill status is "In Committee" and still a few steps away from being passed but, if enough support is garnered, could signal the end for the BitLicense and perhaps a fresh start for cryptocurrency investors and businesses in New York.