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New York Launches Task Force to Evaluate Cryptocurrency and Review BitLicense

Distributed Summary:

  • New York Governor signs bill creating a “digital currency task force”
  • Task force will evaluate crypto within New York and identify potential effects of widespread crypto
  • Will also review the impact of 2015’s infamous, onerous BitLicense program

New York Governor Andrew Cuomo has signed a bill enabling a task force to study regulatory measures for cryptocurrency.

The sponsor of the bill, Assemblyman Clyde Vanel, announced via Facebook that the bill had passed the state Assembly and was signed by the governor, thus going into effect. Claiming that this bill would make New York “the first state in the nation to create a cryptocurrency task force,” Vanel noted that it is scheduled to deliver its first reports by December 15, 2020.

Task Force Details

The bill outlines the composition and duties of a nine-person cryptocurrency task force, which is to receive three members appointed by the governor, two members appointed by the temporary president of the senate, two members appointed by the speaker of the assembly, one member appointed by the minority leader of the senate and one member appointed by the minority leader of the assembly. This reflects only minor changes from the proposed Senate version of the bill, which called for the governor to have greater control over the appointees.

There is also a special point of note among the task force’s duties listed in the bill. In addition to a mandate to “examine and evaluate digital currencies within the state” and “identify the potential effects of the widespread implementation of digital currencies,” the task force is also set to “review the impact of the department’s BitLicense program.”

A Brief History of BitLicense

The BitLicense program is a now infamous measure from the earlier days of the cryptocurrency space, originally put into effect in 2015. One of the first serious attempts by the U.S. legal system to impose official regulations upon Bitcoin, the law put notoriously strict regulations on crypto businesses operating in the state of New York, which predictably led many prominent businesses in the industry to abandon the state entirely.

The BitLicense requirements are still in effect today, and this has repercussions on nearly all crypto companies’ efforts in the state. As of November 2018, the state had only issued 14 licenses, despite the fact that they are required for “any virtual currency business activity.”

In other words, the fact that this task force has been specifically instructed to investigate the fallout of the BitLicense program could have larger implications on the space as a whole. As the group is to cooperate with state and city taxation and finance departments to “make recommendations to further utilize digital currencies within the state,” the task force could conceivably recommend that the program be heavily modified or scrapped entirely.

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