New York Seeking Bitcoin Regulations: Anonymity At Stake

Being anonymous is one of the big selling points, so to speak, behind the use of Bitcoin and similar cryptocurrencies. In the same vein, the ability to be anonymous has also been one of the biggest concerns, and now New York is targeting it with proposed regulations.

The regulations were proposed by the New York Department of Financial Services, more commonly referred to as the NYDFS. The proposal concerns a regulatory framework being called "BitLicense", which is supposed to protect consumers, institute cyber security rules, and attempt to prevent money laundering.

Any firm that receives or transmits a cryptocurrency for consumers, stores, secures, or maintains them, offers conversion services, or buys and sells them as a business will be subjected to the BitLicense framework. Anyone who uses the currencies only for buying or selling doesn't fall under the regulations, however.

Amongst the requirements that firms will assume under a BitLicense includes Verification of Accountholders:

"Firms must, at a minimum, when opening accounts for customers, verify their identity, to the extent reasonable and practicable, maintain records of the information used to verify such identity, including name, physical address, and other identifying information, and check customers against the Specially Designated Nationals ("SDNs") list maintained by the U.S. Treasury Department's Office of Foreign Asset Control ("OFAC")."

You can read the full (and rather extensive) list of requirements here, as well as an official discussion on Reddit.

SOURCE: Ars Technica