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Bitcoin Evangelists Are Furious About New York's Proposed New Digital Currency Rules

•, Rob Wile

Under the draft rules, all firms will have to learn the identities of their customers, will have to maintain their own secure Bitcoin reserve fund, and undergo strict security audits.

The more well-capitalized Bitcoin players, like SecondMarket's Barry Silbert and the Winklevoss twins, have embraced the proposal, saying it provides clarity for how they should be conducting their businesses. All three gave statements at DFS' hearings on the new licenses in January.

But other Bitcoin evangelists hate the draft policies. Ryan Selkis, who blogs about Bitcoin at The Two-Bit Idiot, told BI in an email the proposed requirements would bring onerous new compliance costs on smaller firms. "It's almost hard to believe that the NYSDFS sought to strike an appropriate balance with this initial proposal because these prescriptions seem neither measured or balanced," he said in an email.

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