How regulators turned New York into a Bitcoin hell city

In the 18 months since BitLicense became New York law, New York regulators have only issued two BitLicense licenses. According to Reuters, the regulator has rejected only four BitLicense applications.

Additionally, the backlog for BitLicense applications has reached 15, and the snail-like pace of approval has been criticized.

Patrick Murck, former executive director of the Bitcoin Foundation, told reporters:

“The New York regulator has completely left the digital currency industry behind by putting regulations together and leaving key members behind, choosing instead to focus on traditional service providers.”

The BitLicense project was criticized by the cryptocurrency community during its creation and release. This regulatory scheme was first initiated by Mr. Benjamin Lawsky of the New York Department of Financial Services (NYDFS).

While in office, Lawsky proposed comprehensive regulation of cryptocurrency businesses in New York State, a view that attracted a lot of criticism from cryptocurrency entrepreneurs and critics.

However, when the BitLicense regulations came into effect in June 2015 and became legally binding, Lawsky suddenly chose to leave, and several senior staff members chose to leave shortly afterwards.

Since then, progress on regulating cryptocurrency businesses in New York State appears to have come to a complete halt, with critics pointing out that other states will soon catch up.

California, for example, proposed a BitLicense-like regulation in August, and this month the state even allowed the use of cryptocurrencies as an integrated merchant payment solution for medical marijuana.

“Yeah, why would a Bitcoin or blockchain company want to flee New York?”

The reason is... ahem... BitLicense... ahem...

Even on a consumer level, New York has become an outdated place, with popular cryptocurrency services like ShapeShift and Poloniex blocked in the area. Now, users are forced to go to New Jersey.

At the same time, some people are trying to change the content of the Bitlicense regulations.

“The Bitcoin Foundation is attempting to amend the current version of the New York State Bitlicense http://link.bitcoinspigot.com/22S ”

The addendum will "require each covered entity to assess its specific risk profile and design a plan to address its risks," JD Supra reported.

Another interesting development is that this week, former New York Department of Financial Services consultant Dana Syracuse has joined the law firm Perkins Coie as a blockchain consultant for the company. Syracuse played a key role in the conception of the Bitlicense, but he soon left the New York Department of Financial Services.

Is there still hope?

However, not everyone is pessimistic about the state of Bitcoin business in New York State. Coin Center Executive Director Jerry Brito told Reuters:

"I think it would be very rare for a company to say, we don't want to do business in New York State."

What do you think is the future of BitLicense in New York? Can regulators improve the current situation? Please share your views.