The people who want bitcoin and similar currencies to be regulated by the New York state authorities which regulate financial activities in that state are going to get their wish. It seems like they are "really asking for it," judging by what has been issued by the regulatory authority there. Or, to paraphrase a famous Beatles song, "You say you wanna regulation? Well, you know, we'd all love to see the plan."
If you want to know all about that plan in New York, you need to visit this page: http://www.dfs.ny.gov/about/press2014/pr1407171-vc.pdf
Fair warning: that is the New York state government's web site, and it may want to run scripts through your browser to do all kinds of things you don't want. If you don't have something like "no-scripts" installed to your browser, you might want to review that choice.
In my career over the last few decades, I've worked in industries such as real estate development, port development, finance, accounting, management, consulting, and within information systems: software development, software documentation, custodianship of records for a healthcare enterprise, and digital currency systems. Naturally, I've encountered laws for these industries, been expected to have familiarity with these laws, and in some instances been expected to critique proposed laws and regulations on behalf of the enterprises I worked with. I've seen a lot of laws, and I've seen very few that come close to being as bad as the proposed regulations from the state of New York.
For example, and it seems trivial in some ways, but noteworthy in others, the proposed regulations are intended, quite clearly, from their timing among many other factors, to regulate Bitcoin activities in the state of New York. These regulations have been developed in order to establish regulatory control and authority over businesses that deal in the buying and selling of bitcoin. Discussions of these regulations dating back many months have indicated that bitcoin regulation was coming, that it was to be included in these regulations, and that people should sit up and pay heed if they were engaged in dealing in bitcoin. Not only has all the publicity and discussion of these regulations been about the bitcoin phenomenon, but also the regulations themselves, on page 35, refer to timing of virtual currency events being recorded on a "'block chain' ledger."
So, you would think, as a diligent and responsible consumer of legal documents, that the term "block chain" would appear in the definitions of the law in question. They use the term, they should explain what it means, don't you think? But the definitions pages, starting on page 4, beginning with Section 200.2 Definitions, includes (a) Affiliate and (b) Cyber Security Event, and proceeds alphabetically throughout, and does not include the term "block chain." So, when you get to page 35, if you don't know what a "block chain" is, you are out of luck. Turning back to page 4 isn't going to help. The definitions page makes no mention of bitcoin, either. There is no mention of blockchain-type virtual currencies in the definitions, nor anywhere else in the law, except suddenly on page 35, the timing of certain economic events is supposed to be recorded on this block chain ledger. Whee.
Yes, that is trivial. It is possible for a reasonable person to go out in the wild, connect to the Internet, and find definitions for block chain and lengthy, even academic, peer-reviewed discussions of block chain virtual currencies. But, in terms of law, things that aren't defined in the law shouldn't be included in the law. Unless, of course, you are promulgating bad law.
Now, from the perspective of freedom-loving, individualist, anarchistic persons, such as myself, people who have no reason to respect the concept of government, there are a lot of things wrong with this law that I wish to mention. The law talks very actively about the importance of money-laundering, especially the prevention of money laundering. Section 200.15 "Anti-money laundering program" runs to four pages, beginning on page 25 of the document. I should certainly take a moment to note that Section 200.2 never defines money laundering. Enormous costs for each licence holder are indicated in this anti-money laundering programme, alone. Enormous invasions of customer privacy and a clear requirement that the licencee spy upon all of its customers are indicated. The business costs and the violations of civil liberties indicated ought to be enough to give anyone pause, but nobody in the New York state department of financial services makes any effort even to define money laundering, let alone justify these regulations.
In fact, money is money, whether it is used for buying a bottle of wine, a bottle of water, or a bottle-rocket. Money isn't tainted by its contact with the merchant selling the wine, even though such sales are illegal in a great many nations where Islamic laws, and in many USA jurisdictions where Baptist and other religious convictions make the sale or purchase of alcohol illegal.
But, you say, in my musing mind, "What about the war on drugs?" And I reply, you mean, the war on individual liberty developed in the early 20th Century through a series of international treaties on "narcotics trafficking" which were created by racists, Progressive movement politicians, and diplomats determined to force their will on the entire world's population? You mean the policies which result in millions of arrests in the United States, each year, for the non-violent acts of owning, possessing, buying, selling, or using "illegal" narcotics? You mean the policies which deny and disparage the Biblical command by God to "behold!" that He has given mankind every herb bearing seed and every tree bearing fruit to be as meat (Genesis 1:29)? You mean the racist policies of discrimination, authoritarian control, and police brutality which are a direct subsidy to the military supply contractors, the prison industries, and the surveillance industries? You mean the unconstitutional policies that invoke "civil asset forfeiture" based on admiralty law to seize private property without trial and hold it until the erstwhile owners prove that it was not used in criminal activities? You mean the policies that result in tens of thousands of deaths each year in overdoses and gun fights over criminal turf and in fights with police because the racists who control the governments of the United States and its several states don't think people should be free to put "drugs" in their bodies without permission from the state, or a licensed doctor?
You can imagine how little I care about the drug war.