September 21, 2020

New York court will consider a lawsuit on the abolition of cryptocurrency license BitLicense

New York court will consider a lawsuit on the abolition of cryptocurrency license BitLicense

The New York State Court of Appeals has filed a lawsuit to terminate the BitLicense cryptocurrency license, filed Chino v. New York State Department of Financial Services (NYDFS). The lawsuit is scheduled for October 14.

The statement drawn up by counsel, Pierre Siric, stated the following:

NYDFS on their own initiative without receivinga mandate or instructions from the New York State legislature, implemented a regulatory scheme (known as BitLicense) to suppress the development of the crypto industry in New York. The Office has created a complex and burdensome set of requirements that applicants and licensees working in the region must follow. The cost of obtaining BitLicense is from $ 50,000 to $ 100,000, so almost all cryptocurrency startups have moved the business outside of the state.

Entrepreneur Theo Chayno, owner of Chino,filed a lawsuit in October 2015. The plaintiff said that his company had to close due to the introduction of BitLicense in June. In August, the company sent an application for a license, however, realizing that NYDFS had exceeded its authority, Chayno decided to challenge the legality of the regulator's requirements.

BitLicense has criticized many businesses,working in the field of blockchain. In particular, the Kraken cryptocurrency exchange called for replacing the license issuance scheme with a more rational option. According to Coin Center employees, the current rules have several provisions that make it difficult to develop innovative digital products in the state. Peter Van Valkenburg, director of research at Coin Center, claims that authorities have tightened requirements only for the crypto industry. For example, traditional payment services and banks, unlike crypto enterprises, are not required to follow certain cybersecurity standards and counteract the legalization of illegal proceeds.