Bitcoin Foundation Deems Latest NYDFS Letter 'Disappointing'

The Bitcoin Foundation now suggests it will not receive certain information about the BitLicense until December.

Sep 9, 2014 at 10:16 p.m. UTC
Updated Sep 11, 2021 at 11:09 a.m. UTC

The Bitcoin Foundation is reporting that certain information it requested from the New York State Department of Financial Services (NYDFS) under the Freedom of Information Law will not be delivered as soon as originally suggested.

The latest correspondence stated the foundation would now receive information about the BitLicense's deliberation process within 120 days. The organisation had originally hoped to receive a response within 20 days of its filing.

A post penned by Jim Harper, the Bitcoin Foundation's global policy counsel, outlined what the organisation had hoped to achieve with its original filing, before revealing the updated timeline provided by the NYDFS.

Harper expressed dismay at what he believes is a delay, writing:

"That’s in December, well after comments will close, even with the welcome extension that the NYDFS recently issued."

The Bitcoin Foundation had previously requested evidence as to the "extensive research and analysis" the NYDFS conducted to determine that new regulations are needed for bitcoin businesses.

In particular, the group sought to learn about the risk management and cost-benefit analysis conducted by the NYDFS before it issued its BitLicense proposal.

Advocating for open regulation

In his remarks, Harper stressed this research and analysis would be beneficial to the broader bitcoin community as it seeks to comment constructively on the NYDFS proposal.

Harper wrote:

"Open government laws could really produce their fullest public interest benefits if the community could access this information."

He went on to suggest that the community's technical knowledge, coupled with the regulators' expertise, would provide fuel for policies that promote growth while implementing sufficient consumer safeguards.

Such an approach was most recently proposed by Xapo CEO Wences Casares in a blog post commenting on the NYDFS proposal. Casares even offered the services of his legal and compliance teams to the NYDFS in the hopes of helping to shape the regulation collaboratively.

Finding a silver lining

While Harper was disappointed by the turn of events, he suggested that the agency's latest letter provides "tacit confirmation" that the NYDFS conducted an analysis before issuing the regulatory proposal.

Harper theorized that the NYDFS would have likely informed the Bitcoin Foundation that such analysis did not exist in the letter, if that were the case.

He concluded:

"That good news makes me all the hungrier to get the information."

CoinDesk reached out to the NYDFS for additional comment, but did not receive an immediate response.

Man withholding information via Shutterstock

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