A license, the BitLicense, is required for any individual, or business, to conduct any form of business activity with New York State or a resident of, or business within the jurisdiction of, the State of New York, in the State of New York, from any other state in the United States, or from any other country in the world, as defined by the regulations of 23 NYCRR 200 in full effect as of August 9th, 2015.
THE TOP TEN
The application is 31 pages, requires additional documents, some that will accrue additional costs, and must be completed in its entirety at the risk of forfeiture of the $5,000.00 required application fee.
Incomplete applications are returned with an itemized list of necessary documents and/or other materials, required to be considered a completed application. What will not be return is the 5,000 smackers.
Most of us have heard about this legendary, non-refundable, $5000.00 application fee. That's nothing compared to the other hidden gems in this document.
Here are the real "Gotcha's", David Letterman style. The 10 most ridiculous "Gotcha's" in the NY BitLicense Application.
#10.. The $5,000.000 Non-refundable fee.
This is out of reach for a lot of start-ups, but it's a bad joke, because this is really the least of their worries, being one of the less expensive things about the BitLicense
#9... 15 years of work history!
What about people who are independently wealthy and haven't done a damn thing? What about people who have only worked for 7.32 years so far? Almost as ridiculous as big brother #8...
#8... Permission to contact every company you've ever worked for!
Yeppers! Including Mr. McDonalds manager, where you may have worked in High School, lets hope you didn't piss him off, he might still be there! There's also a "kiss your privacy goodbye" form that must be signed, stating that the NYDFS can go ask any question they want to and acquire every juicy detail about any position you held at any company for the last 15 years.
Complete educational history is required as well.
Complete educational history is required as well.
#7... 10 years of court records in EVERY county you've ever lived!
Not just your records, all of them, every single scrap of court records in every county you've ever lived. Including Federal, State, and Local! All court records for a decade if you waltzed through the county for any period of time.
#6... Audited Financials! Weeeeeeee!
Across the board audited financials (some certified). For owners, affiliates, shareholding companies, board members, and anyone who mentions your company name! Ok, perhaps not that last part. This can cost $10,000.00, $20,000.00, or more. Even a startup company is looking at about $5,000.00 realistically.
"What is this you say? A company owns part of your startup? 2 years audited financials for them! That'll teach 'em to try and make things actually work around here!"
"What is this you say? A company owns part of your startup? 2 years audited financials for them! That'll teach 'em to try and make things actually work around here!"
#5...You must predict the future!
For #5, you're going to need Doc Brown's magic hat. You have to provide any contract you are engaged in, or any contract you will be engaged in, that being future tense! How the hell is anyone suppose to know this? Yes, I know what they "mean", but this is still ridiculous.
#4... Paw Prints, Deeper Scoping, and ... wait for it .... SELFIES!
As if all of the aforementioned crap is not enough, get ready to shell out a few more thousand bucks for background checks (by licensed PI firms only) across the board, fingerprints, and ... you need to include a 2" by 2" Selfie! Say cheese!
Need a soothing ointment yet? Hold on, it gets worse.
Need a soothing ointment yet? Hold on, it gets worse.
#3... All of this crap for your Kiddo's too!
Indeed! In fact, go ahead and bring the "Fam". All beneficiaries are also subject to this intrusive scrutiny and have to supply a good portion of the same information that a Principal shareholder does. So if your kid's been bad, be forewarned, you might just find out exactly how bad!
#2... The SECRET SURETY BOND!!
Yes folks, there's a "hidden fee". Shocker there! It's a surety bond that has to be in existence, but here's the swift kick in the groin.
THEY DO NOT TELL YOU HOW MUCH!
This is decided later, and at the discretion of the DFS. So be prepared to bribe some officials, because it may be the only way in. This is utterly ridiculous. After all is said and done, they can just pronounce a 1MM surety bond on you if they wish. Just to prove your broke if they haven't forced you into bankrupcty already.
THEY DO NOT TELL YOU HOW MUCH!
This is decided later, and at the discretion of the DFS. So be prepared to bribe some officials, because it may be the only way in. This is utterly ridiculous. After all is said and done, they can just pronounce a 1MM surety bond on you if they wish. Just to prove your broke if they haven't forced you into bankrupcty already.
#1... And the #1 most ridiculous "Gotcha" in the BitLicense application is ....
BITCOIN IS NOT ACCEPTED HERE!
All this yap about virtual this, that and the other with innovation, blah, blah, blah ... and they will take nothing but a check.
For some reason, I thought this was the lamest thing about the entire process. C'mon, you guys (NYDFS) want to regulate something of which you also "claim" you want it's innovation encouraged, and yet, you won't accept it? WTF?
But hey! They'll take a worthless piece of paper called a check.
They learned how to make it appear as if they are helping the little guys (startups) while making it impossible and out of reach for any of them. Except Coinbase, of course, being that they still say that they are a startup, a 75 Million dollar, eventual Z Round startup, but a startup nonetheless. Hell, they might not even enjoy this microscope up the rear.
Even if a startup did manage to scrape through this process, it's owners limping along in the aftermath of the grueling spanking of intrusive requirements and financial squeeze, there's still the ultimate VETO power of the surety bond. The NYDFS examiner of your application might just be in a bad mood the day he, or she, reviews your application and just slaps you with a nice fat whopper.
With less than perfect credit commanding a 15% payment of the total surety bond, the NYDFS can just finish you off, that is, if the application process doesn't kick your ass in the first place.
Really? They expected everyone to think they suck?
Am I hearing this accurately?
Benjamin M Lawsky is undoubtedly laughing hysterically that 22 companies actually subjected themselves to this probing, and now, of course, he's quickly stepping down and forming his own little "consulting" firm, rather conveniently timed wouldn't you say?
They call this a "drive-by" on the street, where you swoop in and destroy everything others spent years building and then scurry off and hide.
To be honest, I could have made a top 50, but it wouldn't have really rolled off of the tongue as elegantly and quite frankly, it just aggravates me the more I think about it. I am sure there are allot of other opinions on the top 10 as well, feel free to comment, it's wide open.
However fear not! There's more to come, we have a list of top 10's on the way! So until then ... run... run far away from this application, like I said before, it's a mouse trap.
For some reason, I thought this was the lamest thing about the entire process. C'mon, you guys (NYDFS) want to regulate something of which you also "claim" you want it's innovation encouraged, and yet, you won't accept it? WTF?
But hey! They'll take a worthless piece of paper called a check.
The Veto Power
Have they learned anything during this BitLicense process? Oh wait, yes they did!They learned how to make it appear as if they are helping the little guys (startups) while making it impossible and out of reach for any of them. Except Coinbase, of course, being that they still say that they are a startup, a 75 Million dollar, eventual Z Round startup, but a startup nonetheless. Hell, they might not even enjoy this microscope up the rear.
Even if a startup did manage to scrape through this process, it's owners limping along in the aftermath of the grueling spanking of intrusive requirements and financial squeeze, there's still the ultimate VETO power of the surety bond. The NYDFS examiner of your application might just be in a bad mood the day he, or she, reviews your application and just slaps you with a nice fat whopper.
With less than perfect credit commanding a 15% payment of the total surety bond, the NYDFS can just finish you off, that is, if the application process doesn't kick your ass in the first place.
More to Come
CoinDesk reported that 22 applications came in ($110,000 guaranteed revenue for the NYDFS), which means hundreds, if not thousands, of non-exempt companies, did not file. The NYDFS states that this was "about as expected".Really? They expected everyone to think they suck?
Am I hearing this accurately?
Benjamin M Lawsky is undoubtedly laughing hysterically that 22 companies actually subjected themselves to this probing, and now, of course, he's quickly stepping down and forming his own little "consulting" firm, rather conveniently timed wouldn't you say?
They call this a "drive-by" on the street, where you swoop in and destroy everything others spent years building and then scurry off and hide.
To be honest, I could have made a top 50, but it wouldn't have really rolled off of the tongue as elegantly and quite frankly, it just aggravates me the more I think about it. I am sure there are allot of other opinions on the top 10 as well, feel free to comment, it's wide open.
However fear not! There's more to come, we have a list of top 10's on the way! So until then ... run... run far away from this application, like I said before, it's a mouse trap.
As a company that submitted the BitLicense application, I think this article is extremely immature and disingenuous. So many ready vocal voices of criticism about regulation by people who seemingly have too little life experience to wisely judge the prudence of regulation and its merits. Seeing childish articles like this, along with numerous reddit posts of the same is an unfortunate sign of how much further the bitcoin industry has to go to mature. Bitcoin won't achieve mass adoption if children are running companies that handle people's money. I can't wait for bitcoin to move beyond this level of conversation.
ReplyDeleteSucks for you. Bitcoin doesn't need financial service companies. I say regulate them all to hell. We don't need them anymore. That was the old paradigm. All we need is software written by talented crypto-anarchists. In the meantime, do have fun being fucked like a real bank. When you're done, learn about Bitcoin.
DeleteWhich company?
DeleteUntil Marshall Swatt names the company in question, he is considered a zero-credibility liar.
DeleteClear your name. Name the company. It's all for regulation, transparency, and maturity after all.
The only reason Marshall is happy about the regulation is because it keeps his competition out. Only if MySpace had that privilege.
DeleteMarshall seems to be working for coinsetter.com.
ReplyDeleteHe also seems to be the only adult in the room.
The only adult in the room?
DeleteAfter reading about these very 'adult' conditions I'm shocked anyone would subject themselves to this abuse.
Although perhaps I shouldn't be. Florida has received a lot of refugees fleeing New York (both city and the wider state) due to the large, expensive, and unresponsive government they labored under. Most (but not all) of these former New Yorkers are now trying desperately to recreate the same bloated behemoth that ran them out.
If these 'resonable' regulations sound right to you, then please remain in New York, or move there immediately. They already have an 'adult' level of regulations needed to keep you safe from the evils of competition and due dilligence.
Are there any intrusions, harassments, and 'fees' that you wouldn't put up with?
What kind of small business would (or even could) put up with this?
I am also an adult, but not one taking sides, I trying to learn more on the topic. I personally thought the article was hilarious, but more importantly very informative.
ReplyDeleteI would like to ask Mr. Swatt a question if he would be so kind as to share. I am facing a situation which may require this license and am trying to gather information.
Regardless of any presentation found offensive, are the actual statements here factual? For example #3 and #2. Are these accurate or is this what you are referring to as disingenuous?
In my particular case, both of these items are critical pathways. First, #2 does not sound correct, the Money Transmitters bond in my State is known and has to be obtained prior to the application. #3 is the more pressing issue, involving a beneficiary in my case, would not be possible.
You response is appreciated.
Well-researched and informative, thanks. View this profile Browser games. Free to play and accessible on any device with a web browser.
ReplyDelete