Two top Circle executives have issued strong critiques of New York's proposed bitcoin regulations.
Allaire is one of a growing crowd of industry leaders to weigh in on the controversial BitLicense system in recent weeks. Yet, Circle's response marks one of the first times a bitcoin company executive has declared publicly that their business would refuse to provide services to New York customers because of the proposed regulatory framework.
The Circle CEO wrote in the blog post that the regulations are “technically impossible” to comply with, creating a radically more challenging environment for digital currency companies to operate in.
The full post included several proposals detailing how Allaire believes the BitLicense proposal could be made more inclusive, while better positioning the bitcoin industry for growth.
Circle not alone in opposition
Calling the proposal potentially “devastating to the industry”, Allaire said that the regulations should focus more on the financial side of the bitcoin economy than the software or infrastructure aspects. This top-down approach puts developers at a significant disadvantage owing to what Allaire said were onerous and misguided rules.
Allaire’s comments were paired by an essay issued by Neville. Published on popular blog publishing platform Medium, Neville's piece asserts that Circle is not the only company looking to stay out of New York should the framework receive final approval.
In his blog post, Allaire argued that it doesn’t make sense for the law to target companies that aren’t handling fiat currencies. Though, he noted his belief that this provision is a reflection of a broader misunderstanding of bitcoin and block-chain technology, commenting that misguided focus on the money aspects of bitcoin could imperil the still-nascent industry.
Leave new companies be
Allaire said that Circle would consider working with New York customers under the BitLicense system – but only if specific problems are addressed and rectified.
Beyond shifting the focus away from software developers, programmers and other businesses that aren’t acting as money transmitters, Allaire said that regulators need to be mindful of the unique challenges associated with starting a company. He advocated for a “risk-based, tiered” regulatory environment that provides a degree of support to bitcoin startups.
Neville echoed this sentiment, saying that these burdens will stifle any involvement that venture capital firms may have sought in New York bitcoin companies, adding:
For more on how the bitcoin industry is reacting to New York's proposed regulation, read our most recent report.
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