A bill that may turn New York into a friendlier place for crypto entrepreneurs has been introduced in the state's Assembly. The draft is intended to "safeguard" cryptocurrency business activity and "prohibit" licensing fees. Its sponsors want to replace the costly Bitlicense regulations with a licensing regime based on audits. The aim is to protect investors, while supporting growth in the crypto sector.
Introducing the Digital Seal
If adopted, Assembly Bill A09899 will amend the New York's banking law. The current licensing regime will be replaced with a new mechanism based on independent audits, which will protect investors and reassure customers. The new §9-x section will require any private individual or corporate entity conducting crypto-related business activity to be audited by a public or a private third party depository service.
The auditors should ensure that persons and companies dealing with cryptocurrencies have established security protocols to safeguard them from theft, thus increasing public trust. They must also verify if crypto businesses maintain a fund insuring a portion of their account holders' assets by the Securities Investor Protection Corporation or other approved insurer.
Third parties are expected to regularly examine holdings of entities conducting crypto business to ensure proper ownership of assets. Those that are in full compliance with the law should receive a digital New York State seal of approval. It will replace the current fee-based licenses. The draft unambiguously states:
Notwithstanding any other law, rule or regulation, no person, corporation, partnership or other entity that conducts cryptocurrency business activity shall be required to pay a licensing fee.