Theo Chino and his attorney Pierre Ciric have been trying to eliminate BitLicense almost since its enactment. Now they are pushing their case to The New York Court of Appeals, which is the highest court in the state of New York.
BitLicense Is Onerous and Too Intrusive
BitLicense was the first comprehensive virtual currency regulatory framework enacted in the United States. The New York Department of Financial Services (NYDFS) issued this regulatory framework. It requires that businesses transacting with virtual currencies must be licensed to operate with New York customers (retail or institutional) or otherwise operate in New York state.
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Expressly, companies and individuals are prohibited from engaging in activities involving cryptocurrencies in New York or serving New York State residents without a BitLicense.
According to NYSDFS, BitLicense is a reasonable response to risks posed by the rise of Bitcoin and other cryptocurrencies. According to NYSDFS, “BitLicense provides key consumer protection, anti-money laundering, cybersecurity rules to help safeguard customer funds and root out illicit activity.”
However, for many, this controversial regulatory framework is an overreach. Opponents deem it onerous and too intrusive. An article published on the Fordham Journal Of Corporate & Financial Law explains,
“The BitLicense requires that records be kept for up to seven years of every cryptocurrency transaction carried out by a company. Sensitive information, such as the physical addresses, bank statements, and names of customers who are parties to that transaction, must also be recorded and be made available to the NYSDFS upon request. A large part of the ethos surrounding cryptocurrencies is a desire for privacy and freedom from intrusive government regulation, and many cryptocurrency advocates felt that complying with the BitLicense would be a betrayal of their fundamental values.”
Thus, Theo Chino filed Article 78 to abolish BitLicense. Article 78 proceeding of the New York Civil Practice Laws and Rules basically allows any individual to challenge the activities of an administrative agency in court, or to eliminate regulation.
Ciric: The NYDFS Was Not Entitled to “Invent” Regulation
One of Theo Chino’s attorney main arguments is that NYDFS, as a regulator, can only regulate. The NYDFS is not entitled to “invent” regulation. “[Regulators] can only act within the framework of a statute, law, that has been passed by a legislature,” says Ciric.
As presented in the motion for leave to appeal to the New York State Court of Appeals,
“DFS, of its own initiative, and without the New York State Legislature’s mandate or instructions, adopted a regulatory scheme (commonly called the ‘BitLicense’) to quash the growth of cryptocurrency-based businesses in New York.”
What are your thoughts about abolishing BitLicense? Let us know in the comments below.
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