The Electronic Frontier Foundation (EFF), the leading nonprofit organization defending civil liberties in the digital world since 1990, is opposing California’s impractical Bitcoin regulation proposed as A.B. 1123.

In August of 2015, EFF opposed a similar Bitcoin regulatory framework called A.B. 1326, better known as the Californian BitLicense. At the time, members of EFF communicated with the author of the bill and expressed the organization’s concerns to lawmakers.

In an article entitled “A License to Kill Innovation: Why A.B. 1326—California’s Bitcoin License—is Bad for Business, Innovation, and Privacy,” EFF wrote:

“We have philosophical issues with A.B. 1326—both the type of regulatory scheme it’s proposing as well as the timing of this regulation in relation to the development of new virtual currency technologies—and we also have concerns about how the bill is technically written.”

EFF then outlined the following issues with A.B. 1326:

  • The regulation is premature; digital currency is an industry in its infancy.
  • Having different regulations for cryptocurrencies in every state will create confusion for consumers.
  • The bill could chill virtual currency innovation in California.
  • The bill’s definition of “virtual currency businesses” is vague, so it’s impossible to tell what the bill will do.
  • The application requires irrelevant data from the applicants, and applicants can be denied a license with no explanation with limited opportunity to appeal.

In consideration of the above-mentioned philosophical issues with the legislation, EFF urged the state’s lawmakers to observe the cryptocurrency industry, market and landscape as they develop. The organization further emphasized how the irresponsibility of regulating a technology at its infancy could severely affect its industry.

As a result of EFF’s contribution and efforts, A.B. 1326 was denied for the second time in 2016. Lawmakers of the state of California came to a consensus that the requirement of significant fees and administrative hurdles to startups within the cryptocurrency industry would prevent the industry to grow, mature and develop.

However, this year, a new California BitLicense under the name A.B. 1123 was submitted for review and approval. According to EFF, the new California BitLicense bill portrays the same philosophy and requirements as its previous proposals.

Thus, EFF shared with some community members within the Bitcoin and cryptocurrency industries that the organization will oppose A.B. 1123. Some community members revealed that EFF plans to take action in the near future.

The bill read:

“This bill would enact the Virtual Currency Act. The bill would prohibit a person from engaging in any virtual currency business, as defined, in this state unless the person is licensed by the Commissioner of Business Oversight or is exempt from the licensure requirement, as provided.”