The Chamber of Digital Commerce (CDC) has submitted its official comments to the New York Department of Financial Services (NYDFS) regarding the BitLicense proposal.
The CDC offered a broad critique of the proposal, suggesting that the NYDFS needs to revise its definition of 'virtual currency' and 'virtual currency business activities' to avoid what it called an "egregious act of regulatory overreach".
The full 10-page filing goes on to suggest that the NYDFS should include a safe haven provision for startups, exempt small businesses from regulation, make better use of existing regulation and extend its current 45-day comment period so that the industry would have more time to fully respond to the proposal.
Further, the CDC offered its services to the NYDFS, suggesting that it could provide the department's members with the necessary information to revise the proposal, and expressed its hope that its comments could provide a similar service to the community.
Small business exemption
Perhaps most notably, the CDC advocated for small businesses, defined under New York law as those that employ 100 people or less, to be excluded from the law. Businesses that hold under a certain amount of assets, Boring said, should also be exempt from compliance.
The filing further states that the NYDFS is required to accommodate small businesses when writing its proposed rules, saying that this is mandated by Section 202-B of the New York Administrative Procedures Law.
Freedom to invest and innovate
The CDC also took aim at Section 200.8(b), which relates that bitcoin businesses maintain their profits and earnings in permissible investments denominated in US dollars, arguing businesses should be able to invest profits without restrictions provided they maintain full reserves.
Under the proposal, permissible investments include certificates of deposit, money market funds, state or municipal bonds and US government securities.
Section 200.10, the provision that requires bitcoin businesses to receive written approval from the NYDFS for any new product, service or activity, was also cited for revision.
Arguing that the provision be struck from the proposal, Boring said:
She added: "Having a regulator calling the shots in the marketplace, rather than protecting consumers, would cripple any industry and would take NYDFS far outside its competence and appropriate role as regulator."
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