SegWit2x will result in cryptocurrency businesses operating in New York to break BitLicense rules “no matter the outcome” of the hard fork.

An email sent to the New York Department of Financial Services (NYDFS) this week is causing more controversy over November’s planned chain split, accusing lawmakers of failing to act on legal obligations.

“[...] This email requests that NYDFS enforce the provisions of the Virtual Currency License (“Bitlicenses”) on those entities that are licensed and other entities operating unlicensed virtual currency businesses in the State of New York,” it states.

“Several Bitlicensed entities are engaged in activities in clear violation of the Bitlicense codes, rules and regulations.”

‘No matter the outcome, violations will occur’

Making specific reference to NYA signees Xapo, Genesis Global Trading, Blockchain.info and Bitfury, author David Anderson suggests that violation of BitLicense rules is certain, regardless how SegWit2x turns out.

“At a minimum, the parameters of the New York Agreement will encumber the virtual currency stored by the licensees by undermining the ability of users to withdraw their virtual currency,” he continued.

“More likely, however, the New York Agreement will create a completely new type of virtual currency, different from the virtual currency originally stored by the licensees. The original type of virtual currency stored by the signees will become interoperable or will cease to exist altogether. No matter the outcome, violations of Section 200.9 (b) and/or (c) will occur.”

The legal aspects of the Bitcoin hard fork have rarely entered public debate, with Core developer Peter Todd subsequently picking up on the “interesting” idea.

Interesting: legal argument that NYA/2X signers are aiming to control a cryptocurrency, which is regulated under Bitlicense. https://t.co/J3y5GuQMhM — Peter Todd (@petertoddbtc) October 27, 2017

Not everyone was convinced, however, with Blockchain attorney Marco Santori describing Anderson’s arguments as “dumb and not interesting.”

In Europe meanwhile, an equally unpopular idea came from Finnish Pirate Party founder Rick Falkvinge, who suggested that if 2x were to fail, miners should also abandon the already-active implementation of SegWit on the Bitcoin network.

If #bitcoin doesn't upgrade to 2x as agreed, wouldn't it be reasonable that miners also roll back the first part of the agreement, Segwit? — Rick Falkvinge (@Falkvinge) October 24, 2017

“There doesn't have to be wide support. There just has to be honor to roll back an agreement not upheld,” he added.