The BitLicense, introduced by Benjamin Lawsky, is described as the worst piece of cryptocurrency regulation in history. It resulted in cryptocurrency companies having to adhere to policies and pay a significant amount of money, which proved too expensive for most startups. Companies that were granted the BitLicense were also placed under the jurisdiction of the SEC and had to comply with most of the same rules as the stock market. The Federal BitLicense idea is being pushed by SBF, who believes it will work since it will be enforced by the federal government. However, the BitLicense would destroy decentralized finance, DEXs, and peer-to-peer transactions, which is why the community needs to push back against the idea.
Today, we’re discussing the BitLicense – one of the worst pieces of regulations that the crypto industry has ever seen. It was introduced by New York state back in 2015 and has since made life difficult for crypto customers and users.
The Origin of BitLicense
The BitLicense came into action after the hacking of Mt. Gox in 2014. It was designed to regulate crypto companies, requiring them to adhere to certain policies. But the exorbitant fees made it difficult for startups to comply.
The Impact of BitLicense
Companies that obtain the BitLicense fall under the jurisdiction of the SEC and must comply with the same rules as the stock market. The BitLicense is even more restrictive than the rules on the books for the New York Stock Exchange. The regulation forced many companies to leave New York, including ShapeShift and Kraken.
Benjamin Lawsky – The Villain of Crypto
Benjamin Lawsky, the man behind BitLicense, worked under Chuck Schumer, who has always been an enemy of crypto. Lawsky went on to work for Ripple after introducing the BitLicense. Schumer called the Department of Justice and had them shut down Silk Road and arrested its creator, Ross Ulbricht.
The Future of BitLicense
The New York State Department of Financial Services has proposed to loosen the reins on crypto to spur innovation. Eric Adams, the mayor of New York, is a Bitcoin bull and has called on the state legislature to do away with the BitLicense entirely.
SBF’s Push for a Federal BitLicense
SBF is pushing for a federal BitLicense to destroy decentralized finance (DEXs) and peer-to-peer transactions because they can’t obtain the license. They’re also trying to regulate the crypto industry as a whole, which would be detrimental.
Fighting Back Against Federal BitLicense
The crypto industry needs to put themselves in a position of power and prevent SBF from taking their decentralization. With pro-crypto lawmakers in Congress, Cabinet members, and advocates, it’s possible to fight back against the push for a federal BitLicense.