Citing “a significant amount of public interest” in the Department of Financial Services’ proposed regulatory framework for cryptocurrency businesses, the State of New York has extended the window for which it will hear comments by 45 days.
Comments will now be due by Oct. 21 instead of early September.
The move comes less than two weeks after the NYDFS promised the Bitcoin Foundation more information regarding the projected benefits of its proposal.
“It’s obvious that this is a novel regulation,” Benjamin M. Lawsky, the superintendent of financial services, was quoted as saying in The New York Times on Thursday. “It’s really the collision of banking regulations with new technology, and we want to make sure we get it right.”
“It’s obvious that this is a novel regulation. […] It’s really the collision of banking regulations with new technology, and we want to make sure we get it right.”
- Benjamin Lawsky
Those who support the regulations — or at least concede that they are inevitable — can take comfort in the fact that Lawsky at least appears to want to get these regulations right.
He told CoinDesk on Thursday that while certain pushback was expected, the way community members such as software developers read the proposal came as a surprise to him.
“We saw fairly quickly that certain provisions were being read by software developers as potentially applying to them, and that could stifle [their] development,” Lawsky said.
Companies and Bitcoin users outside of New York — outside of the US, even — had expressed concern over some of the wording in the proposal.
“As written, the proposed regulation is overly broad in its application outside the United States, imposes a disproportionate compliance burden on virtual currency businesses and misapplies normal compliance procedures,” the exchanges BTC China, OKCoin and Huobi said in a joint statement, which we covered here.
Huobi even said it was prepared to “geofence” New York customers if the regulations were enacted as drafted:
“The reason why we feel the need to [make the statement] is because Huobi is an international platform, and Bitcoin regulation in the US will definitely affect our plan of expanding in America directly. Moreover, we believe there will be direct influence to Chinese regulation because the Chinese government watches closely BitLicense in NY [...] Huobi definitely wants to expand our legitimate business in the US but also needs a flexible Bitcoin environment.”
As Redditor /u/atodeediad noted on Friday morning, Lawsky’s office might have another incentive to extend the commentary period (Note: That user’s account was created within the hour of his/her post).
In a March ruling, a federal judge struck down the FAA’s ban on commercial drones because “flight officials did not give the public a chance to comment on the agency's rules,” Ars Technica reported in July. “Congress has delegated rule making powers to its agencies, but the Administrative Procedures Act requires the agencies to provide a public notice and comment period first.”
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