It was announced last week that the Bitcoin Foundation, a U.S. based Bitcoin advocacy organization has retained the services of Ciric Law Firm, PLLC to counsel in its effort to push back against increased federal and state regulatory efforts to control and stifle the adoption and use of “virtual currencies” such as Bitcoin.
The first priority in this effort will be to engage in a more open and diverse dialogue with the U.S. Congress, especially as it relates to the introduction of a bill bringing Bitcoin in the scope of money-laundering enforcement. This approach was recently reflected in the Bitcoin Foundation’s recent opposition to the adoption of the so-called “Uniform Regulation of Virtual Currency Businesses Act” by the Uniform Law Commission (ULC).
The Bitcoin Foundation says they remain opposed to this proposed model act as they believe its approval by states would discourage inclusive financial innovation arising out of blockchain technology and cryptocurrencies like Bitcoin.
Furthermore, the Bitcoin Foundation continues to reject the proposed statute because states already have significant disagreements and approaches as to how to classify or regulate Bitcoin and because the proposed statute is subject to significant legal uncertainty due to the current legal challenge against the New York “BitLicense” before New York courts.
Llew Claasen, the Executive Director of the Bitcoin Foundation said:
“This increased regulatory push by federal and state authorities, if it continues, is sure to threaten the existence of the fintech industry nationwide.”
“Just as the fintech industry’s use of cryptocurrency was stifled in New York by the adoption of the so-called BitLicense, it is highly likely that increased regulatory and legislative burdens will have a similar negative impact. These innovative businesses will migrate to more welcoming jurisdictions and weaken America’s ability to compete in the emerging field of fintech.”
Back in April, the Bitcoin Foundation announced fundraising to help challenge the New York Department of Financial Services’ (NYDFS) “Virtual Currency” regulation promulgated in 2015. This challenge was filed by a small business owner, Theo Chino, the plaintiff in the case filed in the New York State Court System on October 16, 2015.
In 2015, the New York Department of Financial Services (NYDFS) promulgated its controversial “Virtual Currency” regulation (Part 200 of Chapter 1 of Title 23 of the New York Codes, Rules and Regulations), also known as BitLicense, aimed at regulating Bitcoin and other cryptocurrency businesses in New York.
In October 2015, a small business owner, Theo Chino, filed an action seeking $1 billion dollars in damages in New York State Supreme Court against NYDFS arguing that the agency exceeded its regulatory mandate and that regulating Bitcoin lies with the legislature, not NYDFS. The case is Chino vs. NY Dept. Financial Services (Index No. 0101880-2015).