“We’re not the kind of agency that thinks we have a monopoly on the truth and that we’re always right. We feel strongly about a lot of the provisions in the proposed regulations, but we get that there might be things we can improve.” –Benjamin Lawsky

Shortly following the proposed BitLicense, a significant portion of the bitcoin community wrote and signed a letter to the New York Department of Financial Services, pleading for an extension. The extension was granted. The NYSDFS is cooperating. Lawsky wants the best for the future of bitcoin in New York. Governments never lie. Regulations always work. And history never rhymes.

As soon as these regulations were proposed, it was clear how things would unfold.

The NYSDFS would wait for people to make noise and complain. The NYSDFS would pretend to listen, using Lawsky as a friendly mediator. The bitcoin community would proceed to be tricked into a false sense of security because we would feel that our opinions are being taken into consideration. Because these regulations were written with the foresight that corrections would need to be made, they were purposefully written to be insultingly overreaching. At the end of this extension, the NYSDFS will cut out the most extreme sections of the BitLicense, and leave us with the regulations they always intended us to have. We will thank Lawsky and the NYSDFS for allowing us to do bitcoin related things, sort of.

That is the nature of the BitLicense; or as I like to call it, the ban on blockchain innovation in New York. We must all remember that bitcoin is not inherently monetary, that the blockchain is simply a protocol, which is language, which is speech, which is supposed to be protected under the 1st Amendment. Most are not yet believers, but blockchain technology is the next step in internet evolution.

“Imagine 20 years earlier on July 17, 1994, the IntLicense was released to the world for a 45 day review period by the public: Would the majority of Americans know how to reply? How different would our world look today? Would we still have companies like Facebook, Twitter, Netflix, Google and countless other forms of technology we now take for granted. 1994 was a very critical time for the Internet as the first browser was just about to make its official press release on October 13th and people were just starting to get the feel for the AOL instant Messenger and this radical new technology called email.” –Tone Vays

Tone (with modest contributions from myself) has taken the liberty of rewriting the proposed BitLicense. By altering a few of the document’s definitions, such as “Virtual Currencies” to “Virtual Communication”, “Anti-Money Laundering” to “Anti-Anonymous Communication”, and “Compliance” to “Copyright”, we can get a glimpse into what may have been.

Imagine if every blogger had to hire a “copyright” agent. Imagine if every time you wanted to post a comment online, your identity had to be confirmed. Imagine you had to get copyright permissions cleared before you could write anything, or link to content. It’s easy, just think of a blank internet.

Here are some highlights of the altered license:

Section 200.3 License

(a) License required. No Person shall, without a license obtained from the superintendent as provided in this Part, engage in any Virtual Currency [Communication] Business Activity.

(b) Unlicensed agents prohibited. Each Licensee is prohibited from conducting any Virtual Currency [Communication] Business Activity through an agent or agency arrangement when the agent is not a Licensee.

(c) Exemption from licensing requirements. The following Persons are exempt from the licensing requirements otherwise applicable under this Part:

(1) Persons that are chartered under the New York Banking [Commerce & Telecommunication] Law to conduct exchange [knowledge transfer] services and are approved by the superintendent to engage in Virtual Currency [Communication] Business Activity

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Section 200.15 Anti-money laundering [Anti-anonymous communication] program

(1) Records of Virtual Currency [Communication and] transactions. Each Licensee shall maintain the following information for all [communication and] transactions involving the payment, receipt, exchange or conversion, purchase, sale, transfer, or transmission of Virtual Currency [Communication or Commerce]: the identity and physical addresses of the parties involved, the amount or value of the transaction, including in what denomination purchased, sold, or transferred, the method of payment, the date(s) on which the transaction was initiated and completed, and a description of the transaction.

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Section 200.19 Consumer protection

(1) virtual currency [communication] is not legal tender [speech], is not backed [endorsed] by the government, and accounts and value balances [controversial statements] are not subject to Federal Deposit Insurance Corporation [1st Amendment Protections] or Securities Investor Protection Corporation protections [4th Amendment Protections against diary and ‘private papers’ searches];

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Section 200.15 Anti-money laundering [Anti-anonymous communication] program

(3) Reporting of Suspicious Activity. Each Licensee shall monitor for [communication and] transactions that might signify money laundering [anonymous communication], tax evasion, or other illegal or criminal activity and notify the Department, in a manner prescribed by the superintendent, immediately upon detection of such a [communications and] transaction(s).

Section 200.18 Advertising and marketing

(a) Each Licensee engaged in Virtual Currency [Communication] Business Activity shall not advertise its products, services, or activities in New York or to New York Residents without including the name of the Licensee and the legend that such Licensee is “Licensed to engage in Virtual Currency [Communication] Business Activity by the New York State Department of Financial Services.”

Click here to see the IntLicense in its entirety.

We are at a crossroad with bitcoin regulation and if we don’t see these regulations for what they are–a restriction of not just commerce but speech–then we are missing the larger picture and the point that these people have every reason to stifle innovation for their own gains.