It looks like more trouble is brewing on the horizon for Bitcoin companies targeting the New York area. Other than obtaining for a BitLicense to operate legally, new cybersecurity rules have been proposed by the NYDFS. BitLicense holders would have to adhere to these new guidelines as well, although there is a 45-day comment period.
NYDFS Strikes Again With Unnecessary Proposals
It is safe to assume very few people are favoring the New York State Department of Financial Services. This is particularly true in the Bitcoin world, as the BitLicense proposal was seen as invasive and unnecessary. Moreover, very few companies have obtained their license since its inception, which indicates it’s a bit of a mix and match system.
To make matters even worse, new cybersecurity guidelines have been proposed by the NYDFS. While it is true the number of cyber threat sis on the increase as of late, drastic measures are not yet warranted. Protecting the state from these cyber attacks is a top priority, but requiring all licensed companies to maintain a cyber security program can quickly become a costly matter.
NYDFS Superintendent Maria T. Vullo stated.”
“Consumers must be confident that their sensitive nonpublic information is being protected and handled appropriately by the financial institutions that they are doing business with. DFS designed this groundbreaking proposed regulation on current principles and had built in the flexibility necessary to ensure that institutions can efficiently adapt to continued innovations and work to reduce vulnerabilities in their existing cybersecurity programs. Regulated entities will be held accountable and must annually certify compliance with this regulation by assessing their specific risk profiles and designing programs that vigorously address those risks.”
New York wants to position itself as the financial capital of the world. Doing so is quite an ambitious challenge, considering London has held that “crown” for several years now. Taking decisive action against cyber threats is a positive thing, yet this proposal would burden companies with a lot of unnecessary costs. At the same time, there does seem to be an alternative solution on the table.
For the time being, there is a 45-day period during which companies and consumers can submit their feedback to NYDFS. It will be interesting to see what type of feedback will be provided. It seems safe to assume there will be a lot of backlash over this idea, though. For Bitcoin companies, this is not good news, as it only burdens than even more.
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