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Main => General Discussion => Topic started by: bytemaster on June 24, 2015, 08:48:16 pm

Title: BitLicense
Post by: bytemaster on June 24, 2015, 08:48:16 pm
Please brainstorm every rationale why you think Cryptonomex needs to apply for a BitLicense.

How might it apply to us and our partners?
Title: Re: BitLicense
Post by: Method-X on June 24, 2015, 09:17:48 pm
"This balance was highlighted in Lawsky's statements that the law seeks to only apply to "financial intermediaries" and not software providers."

http://www.coindesk.com/new-york-releases-final-bitlicense/
Title: Re: BitLicense
Post by: speedy on June 24, 2015, 09:50:09 pm
Here is my reasoning at why you might be classed as a financial intermediary:

Ripple was fined because they were directly selling XRP, which they acknowledge is their only revenue source. XRP is clearly a financial product so the SEC made the argument they were an unlicensed financial intermediary.

Cryptonomex revenue stream is also largely made by selling BTS, which the community have voted all the delegate staff of Cryptonomex be able to do.

Whether the financial tokens are generated in one go and sold as with XRP, or the financial tokens are generated over time through some vote process as with BTS, I think the SEC wouldnt be interested in the semantics/technicals and see the 2 processes as equivalent.

Btw I dont neccessarily agree with this - just brainstorming but the parallels with XRP are there.
Title: Re: BitLicense
Post by: luckybit on June 25, 2015, 05:16:51 pm
Please brainstorm every rationale why you think Cryptonomex needs to apply for a BitLicense.

How might it apply to us and our partners?

Compliance is a long term strategic advantage and a short term competitive advantage. The fact that Bitshares allows for compliance is a long term competitive advantage.
Title: Re: BitLicense
Post by: pgbit on June 25, 2015, 05:24:23 pm
Please brainstorm every rationale why you think Cryptonomex needs to apply for a BitLicense.

How might it apply to us and our partners?

Compliance is a long term strategic advantage and a short term competitive advantage. The fact that Bitshares allows for compliance is a long term competitive advantage.
What is the cost of a BitLicense, and is that cost sustainable in the current financial environment?
Title: Re: BitLicense
Post by: Ander on June 25, 2015, 05:26:48 pm
How much do they cost?  If it isnt too expensive maybe it best to just apply and be safer.
Title: Re: BitLicense
Post by: mike623317 on June 25, 2015, 05:38:49 pm
I agree with ander.

The US government are essentially looters and they will make the laws that allow legally allow them to loot you once bitshares become big enough, regardless of what the rules are today. Afterall, we already have retroactive laws.
Title: Re: BitLicense
Post by: luckybit on June 25, 2015, 05:50:45 pm
Please brainstorm every rationale why you think Cryptonomex needs to apply for a BitLicense.

How might it apply to us and our partners?

Compliance is a long term strategic advantage and a short term competitive advantage. The fact that Bitshares allows for compliance is a long term competitive advantage.
What is the cost of a BitLicense, and is that cost sustainable in the current financial environment?

If you want your company to be able to interact with New York which is the financial capital of the USA then you need the Bitlicense.

https://www.youtube.com/watch?v=vJwBjBaqSqc
Title: Re: BitLicense
Post by: giant middle finger on June 25, 2015, 06:55:39 pm
When the government shows up at your place of business, you go ahead and give them the middle finger, I'd like to see that

(http://www.reactiongifs.com/r/O0oo0.gif)
Title: Re: BitLicense
Post by: pgbit on June 25, 2015, 07:00:59 pm
http://www.newsbtc.com/2015/06/19/bitlicense-shots-down-another-bitcoin-company-in-new-york/
Title: Re: BitLicense
Post by: werneo on June 25, 2015, 09:13:33 pm
If you want to engage in "Virtual Currency Business Activity" in the financial hub of the universe, you need a bitlicense.

Section 200.3 License
(a) License required. No Person shall, without a license obtained from the superintendent as provided in
this Part, engage in any Virtual Currency Business Activity.

http://www.dfs.ny.gov/legal/regulations/adoptions/dfsp200t.pdf

Bitlicense will give priceless credibility to cryptomomex and the BitShares network. It will have a salutary effect on the price of bts. Likewise, if you *don't* get a bitlicense, credibility will suffer, and price will not be informed by serious investors interested in a credible product.

It's all upside.
Title: Re: BitLicense
Post by: Permie on June 25, 2015, 09:18:56 pm
If you want to engage in "Virtual Currency Business Activity" in the financial hub of the universe, you need a bitlicense.

Section 200.3 License
(a) License required. No Person shall, without a license obtained from the superintendent as provided in
this Part, engage in any Virtual Currency Business Activity.

http://www.dfs.ny.gov/legal/regulations/adoptions/dfsp200t.pdf

Bitlicense will give priceless credibility to cryptomomex and the BitShares network. It will have a salutary effect on the price of bts. Likewise, if you *don't* get a bitlicense, credibility will suffer, and price will not be informed by serious investors interested in a credible product.

It's all upside.
So long as there are no legal restrictions on further development etc
Title: Re: BitLicense
Post by: werneo on June 25, 2015, 09:22:24 pm
If you want to engage in "Virtual Currency Business Activity" in the financial hub of the universe, you need a bitlicense.

Section 200.3 License
(a) License required. No Person shall, without a license obtained from the superintendent as provided in
this Part, engage in any Virtual Currency Business Activity.

http://www.dfs.ny.gov/legal/regulations/adoptions/dfsp200t.pdf

Bitlicense will give priceless credibility to cryptomomex and the BitShares network. It will have a salutary effect on the price of bts. Likewise, if you *don't* get a bitlicense, credibility will suffer, and price will not be informed by serious investors interested in a credible product.

It's all upside.
So long as there are no legal restrictions on further development etc

The development team will create "optional" features for BitShares that will fulfill AML compliance requirements. Anybody using these optional features can consider themselves "regulated" in so far as the government is concerned.
Title: Re: BitLicense
Post by: jakub on June 25, 2015, 09:40:34 pm
The fact of applying for BitLicence might suggest CNX positions itself as an operator of the BTS business.
My understanding was that CNX wanted to limit itself to being a software developer only and if that's the case having BitLicence does not make much sense.

Unless CNX has bigger plans than that.
Title: Re: BitLicense
Post by: arhag on June 25, 2015, 10:12:04 pm
So long as there are no legal restrictions on further development etc

And the costs are not too high to cripple development speed (due to lack of funds) by the nascent Cryptonomex.

And I thought Cryptonomex is only doing software development and consulting. Why should there be any need for a BitLicense in that case? If Cryptonomex does have greater plans that go beyond pure software development that may require such a license, wouldn't it be better to split that role off into another company to protect the development side of things?
Title: Re: BitLicense
Post by: maqifrnswa on June 25, 2015, 10:25:31 pm
So long as there are no legal restrictions on further development etc

And the costs are not too high to cripple development speed (due to lack of funds) by the nascent Cryptonomex.

And I thought Cryptonomex is only doing software development and consulting. Why should there be any need for a BitLicense in that case? If Cryptonomex does have greater plans that go beyond pure software development that may require such a license, wouldn't it be better to split that role off into another company to protect the development side of things?

I think the fear is that without a a license there is always a liability that some regulatory issue may come up, even if they are just doing development and consulting. Even if CNX ends up being cleared in the end, the legal fees responding to inquiries may exceed the cost of just getting a license in the first place.

I don't know about CNX's current investors, but I bet some investors will be a little hesitant about funding unless there is a license (even if there is no reason to have the license). Splitting off the development side may not shield anyone.

There is a need for a license (as in you actually need to get one to be in compliance) and then there is a "need" for a license (to protect against regulatory inquiries and to make investors feel safer about their investments).
Title: Re: BitLicense
Post by: werneo on June 25, 2015, 10:28:04 pm
So long as there are no legal restrictions on further development etc

And the costs are not too high to cripple development speed (due to lack of funds) by the nascent Cryptonomex.

And I thought Cryptonomex is only doing software development and consulting. Why should there be any need for a BitLicense in that case? If Cryptonomex does have greater plans that go beyond pure software development that may require such a license, wouldn't it be better to split that role off into another company to protect the development side of things?

Depending on the role of CNX, this section might apply...

Section 200.2 Definitions
(q) Virtual Currency Business Activity means the conduct of any one of the following types of activities...:
(5) controlling, administering, or issuing a Virtual Currency.

The development and dissemination of software in and of itself does not constitute Virtual Currency Business
Activity.
Title: Re: BitLicense
Post by: puppies on June 26, 2015, 06:23:32 am
As much as I hate to say it.  If there is any question about whether or not you need a bitlicense, and the cost is at all reasonable, I would go ahead and get one.

In my experience it is often better to pay for this "protection".  After all, if you don't something bad might happen you know.

if it ever comes down to defending yourself you have to assume that you will already have been painted in the worst possible light, and dragged through the mud in the media.  Having evidence that you attempted to comply with all stated rules at all times could make a big difference.
Title: Re: BitLicense
Post by: Permie on June 26, 2015, 07:21:02 am
As much as I hate to say it.  If there is any question about whether or not you need a bitlicense, and the cost is at all reasonable, I would go ahead and get one.

In my experience it is often better to pay for this "protection".  After all, if you don't something bad might happen you know.

if it ever comes down to defending yourself you have to assume that you will already have been painted in the worst possible light, and dragged through the mud in the media.  Having evidence that you attempted to comply with all stated rules at all times could make a big difference.
+5%

I think it's important that BitShares the ecosystem isn't registered, or seen that it needs to or should.
CMX could get licensed in prep for their privatised work, and by consequence give the dreaded "legitimacy" to the whole.

CMX could then profit from leasing their liscenced services and help run any future dev/worker proposals in the US in the future (legally ofc)?
Title: Re: BitLicense
Post by: bytemaster on June 26, 2015, 01:51:25 pm
Looking over the BitLicense the requirements are vague and demanding just to apply.   The $5000 submission fee is the least of the costs associated with it.   

Title: Re: BitLicense
Post by: Chuckone on June 26, 2015, 01:59:01 pm
Looking over the BitLicense the requirements are vague and demanding just to apply.   The $5000 submission fee is the least of the costs associated with it.

The costs seem really prohibitive. Is it really necessary to deal with that kind of hurdles if Cryptonomex only design software and do consultation? I believe Cryptonomex should stick to software and blockchain development as its core business and avoid putting itself in the line of fire of regulatory thugs.

Then, down the line, if Bitshares pays off and CNX wants to diversify it might become a good idea.
Title: Re: BitLicense
Post by: karnal on June 26, 2015, 02:00:05 pm
I agree with ander.

The US government are essentially looters and they will make the laws that allow legally allow them to loot you once bitshares become big enough, regardless of what the rules are today. Afterall, we already have retroactive laws.

Which is why, it is worth repeating, get cryptonomex out of the US if you can!!!!!.
Title: Re: BitLicense
Post by: Permie on June 26, 2015, 04:08:34 pm
I agree with ander.

The US government are essentially looters and they will make the laws that allow legally allow them to loot you once bitshares become big enough, regardless of what the rules are today. Afterall, we already have retroactive laws.

Which is why, it is worth repeating, get cryptonomex out of the US if you can!!!!!.
Right behind you on that, but it's not going to happen until the shareholders are willing and able to fund CMX moving their entire families abroad. Either that or have bts be in a position to sack/fire CMX unless they move countries. Even then it's still unlikely.
We can't exactly tell every budding US bts-entrepreneur to GTFO the country either.

Can the business incorporate(?) abroad and have those still on US soil as 'technically' remote work-from-home'rs?

If it means not being able to serve New York then so be it,
(Global market - NY) >> (NY Markets).

If BTS becomes the money machine that it can (without NY) then the worlds current financial hub NY would climb all over themselves to get a piece of the pie, and there would never be any need for BTS or CMX to get in to bed with crooks
Title: Re: BitLicense
Post by: speedy on June 27, 2015, 09:52:16 am
31 pages including:

Quote
Applicants must also provide an investigative background report prepared by an independent investigatory agency for each individual applicant, including information such as credit history, employment history, and motor vehicle ownership history. Three personal references from non-relatives are required for all applicants.
http://cointelegraph.com/news/114681/new-york-releases-31-page-bitlicense-application-form

What a total waste of time. They want to know what your old cars were? Why not ex-girlfriends too?
Title: Re: BitLicense
Post by: cass on June 27, 2015, 10:02:22 am
www.dfs.ny.gov/legal/regulations/vc_license_application.pdf
Title: Re: BitLicense
Post by: werneo on June 27, 2015, 10:42:51 am
Bitlicense is required for digital currency exchanges.

The BTS network provides backbone services to those exchanges.

So, the network should have the ability to serve the needs of any exchange that wants to be compliance with bitlicense.

Will the BTS network have these (optional) compliance widgets built in? or not?

Quote
Virtual Currency Business Activity means the conduct of any one of the following types
of activities:
5. controlling, administering, or issuing a virtual currency.

If CMX does anything remotely like this, then it needs a bitlicense.

Also, having a bitlicense might help inform the CMX development team about what kind of network add-on features they might create that would help their clients (like CCEDK and banx.io) be in conformity with their own need for a bitlicense.


Title: Re: BitLicense
Post by: speedy on June 27, 2015, 10:46:16 am
Quote
Virtual Currency Business Activity means the conduct of any one of the following types
of activities:
5. controlling, administering, or issuing a virtual currency.

If CMX does anything remotely like this, then it needs a bitlicense.

They dont control any virtual currency, just write open source software - its a fair argument. If they attempted to do something to BTS like enforce ID checks for everyone, the community would fork the software. Therefore they are not in control.
Title: Re: BitLicense
Post by: Permie on June 27, 2015, 11:22:15 am
Bitlicense is required for digital currency exchanges.

The BTS network provides backbone services to those exchanges.

So, the network should have the ability to serve the needs of any exchange that wants to be compliance with bitlicense.

Will the BTS network have these (optional) compliance widgets built in? or not?

Quote
Virtual Currency Business Activity means the conduct of any one of the following types
of activities:
5. controlling, administering, or issuing a virtual currency.

If CMX does anything remotely like this, then it needs a bitlicense.

Also, having a bitlicense might help inform the CMX development team about what kind of network add-on features they might create that would help their clients (like CCEDK and banx.io) be in conformity with their own need for a bitlicense.
User issued assets (what banx will be using) do include optional functionality to freeze, reverse and identify. These features can be locked on/off and unchangeable post-issuance

Market pegged assets (bitUSD etc) are not issued by anyone, they are the product of an agreement between any two parties, anywhere in the world. These assets can't be frozen or controlled.

AFAIK CMX has not issued a UIA or any assets that allow for control, only built the system which enables that functionality.

Although I don't think CMX need one, I do see how it may be profitable in the future for cmx to sell their knowledge of the application. And newcomers looking to be 'compliant'/obedient could potentially feel more comfortable due to that fact.
But if this is something that members or profit-seeking entrepreneurs want to see then I think it would be best to set up this bitlicense-entity as entirely separate to CMX.
Is there really a need for a bit-license trailblazer?
Title: Re: BitLicense
Post by: Stan on June 27, 2015, 03:17:02 pm
Bitlicense is required for digital currency exchanges.

The BTS network provides backbone services to those exchanges.

So, the network should have the ability to serve the needs of any exchange that wants to be compliance with bitlicense.

Will the BTS network have these (optional) compliance widgets built in? or not?

Quote
Virtual Currency Business Activity means the conduct of any one of the following types
of activities:
5. controlling, administering, or issuing a virtual currency.

If CMX does anything remotely like this, then it needs a bitlicense.

Also, having a bitlicense might help inform the CMX development team about what kind of network add-on features they might create that would help their clients (like CCEDK and banx.io) be in conformity with their own need for a bitlicense.
User issued assets (what banx will be using) do include optional functionality to freeze, reverse and identify. These features can be locked on/off and unchangeable post-issuance

Market pegged assets (bitUSD etc) are not issued by anyone, they are the product of an agreement between any two parties, anywhere in the world. These assets can't be frozen or controlled.

AFAIK CMX has not issued a UIA or any assets that allow for control, only built the system which enables that functionality.

Although I don't think CMX need one, I do see how it may be profitable in the future for cmx to sell their knowledge of the application. And newcomers looking to be 'compliant'/obedient could potentially feel more comfortable due to that fact.
But if this is something that members or profit-seeking entrepreneurs want to see then I think it would be best to set up this bitlicense-entity as entirely separate to CMX.

Is there really a need for a bit-license trailblazer?

This is a worthwhile question.  Not something CMX is interested in doing - we want to remain a software company that merely licenses its products to others for use in whatever jurisdictions feel safe to them.  (And, where possible, supply the tools they need to be compliant with whatever their relevant authorities demand.)

But it does point out a potential Wide Open Market Niche for someone else to exploit.   I'm pretty sure the BitShares community is not interested in sacrificing its free enterprise support to please overreaching regulators, but perhaps some might be interested in hedging their bets by owning shares in a chain dedicated to trailblazing a solution designed to compete and win in a bit-license submissive battle space (oxymoron intended).

Eventually, every ecological niche will get filled with a blockchain life form conditioned to thrive under those conditions.  Opportunities for entrepreneurs to fill those niches will abound.

(http://i.gyazo.com/6183a63ebf1be8c29c5346ca01f36e9c.png)


Title: Re: BitLicense
Post by: emigalotti on July 14, 2015, 02:47:25 am
www.dfs.ny.gov/legal/regulations/vc_license_application.pdf
All it's there.