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Bitcoin Exchange Receives First License in New York State

nytimes.com

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Re: Bitcoin Exchange Receives First License in New York State

#11

Post by dragontamer »

Animats wrote: post #9

Read their terms. They're explicitly front-running. Price data on the public site is delayed (they don't say by how much), but "market makers" can buy faster access. Their FDIC insurance as a trust company covers only US dollars, not Bitcoins. Bitcoins are uninsured. If you have a disagreement with the exchange part of the company, you have to go to binding arbitration in Singapore.

Thanks for the info.

Coinbase delays by like... a week though. So a minor delay on price data is still better than the status-quo. We need more BTC exchanges to open up and compete against each other.

Re: Bitcoin Exchange Receives First License in New York State

#12

Post by tinkerrr »

dragontamer wrote: post #11
Animats wrote: post #9

Read their terms. They're explicitly front-running. Price data on the public site is delayed (they don't say by how much), but "market makers" can buy faster access. Their FDIC insurance as a trust company covers only US dollars, not Bitcoins. Bitcoins are uninsured. If you have a disagreement with the exchange part of the company, you have to go to binding arbitration in Singapore.

Thanks for the info. Coinbase delays by like... a week though. So a minor delay on price data is still better than the status-quo. We need more BTC exchanges to open up and compete against each other.

That's not really true for Coinbase Exchange, which is real-time. You don't need to wait for a week, just buy/sell at the spot price. No pricing delays, no "market maker prices", which was rightly pointed out by the OP to be front-running and no other gimmicks. Also, no Singapore arbitration.

Re: Bitcoin Exchange Receives First License in New York State

#13

Post by reviseddamage »

Animats wrote: post #9

Read their terms. They're explicitly front-running. Price data on the public site is delayed (they don't say by how much), but "market makers" can buy faster access. Their FDIC insurance as a trust company covers only US dollars, not Bitcoins. Bitcoins are uninsured. If you have a disagreement with the exchange part of the company, you have to go to binding arbitration in Singapore.

How does one ensure Bitcoins?

Re: Bitcoin Exchange Receives First License in New York State

#14

Post by reviseddamage »

iancarroll wrote: post #6
thinkcomp wrote: post #2

There's an error in the first paragraph of this article. A New York license allows one to operate legally in New York only, not the entire country.

It looks like this is a banking charter and not a money transmitter license (?)

It is neither, it is a Trust Company charter.

Re: Bitcoin Exchange Receives First License in New York State

#15

Post by thinkcomp »

PierreRochard wrote: post #8
thinkcomp wrote: post #7

Earlier quoted context omitted.

I thought that was possible but it's inconsistent with everything else I know. I think it's the reporter's misunderstanding of what a money transmission license is, though I'm happy to be corrected if anyone can find proof that a BitLicense suddenly shifted from being a modified MTL to a bank charter after the comment period... It seems like the FDIC would have a lot to say about that; also it would be totally insane…

See here: http://www.dfs.ny.gov/about/press2015/pr1505071.htm

This definitely raises more questions than it answers. Can a typical money transmitter just pretend to handle Bitcoin as well and magically exempt itself from the state money transmission framework? Do other states consider this kind of trust company to be a bank or a money transmitter? What does FinCEN think?

Re: Bitcoin Exchange Receives First License in New York State

#16

Post by thinkcomp »

reviseddamage wrote: post #14
iancarroll wrote: post #6

Earlier quoted context omitted.

It looks like this is a banking charter and not a money transmitter license (?)

It is neither, it is a Trust Company charter.

...which is odd because according to FinCEN (the federal government) Bitcoin exchanges are money transmitters. But a money transmitter could be any company so maybe it's not so odd.

These laws are an absolute mess is the lesson here.

Re: Bitcoin Exchange Receives First License in New York State

#17

Post by reviseddamage »

thinkcomp wrote: post #7
iancarroll wrote: post #6

Earlier quoted context omitted.

It looks like this is a banking charter and not a money transmitter license (?)

I thought that was possible but it's inconsistent with everything else I know. I think it's the reporter's misunderstanding of what a money transmission license is, though I'm happy to be corrected if anyone can find proof that a BitLicense suddenly shifted from being a modified MTL to a bank charter after the comment period... It seems like the FDIC would have a lot to say about that; also it would be totally insane…

The problem is that a Trust Company does have properties that require it not to have MTL's, but it also is restricted in few areas, such as custody to custody movement. Getting a Trust charter is not easy, there is no worry of it being handed out like free candy. I think you will find companies getting Trust charters, only to realise that there are certain things it can not functionally do.

Re: Bitcoin Exchange Receives First License in New York State

#19

Post by reviseddamage »

thinkcomp wrote: post #16
reviseddamage wrote: post #14

Earlier quoted context omitted.

It is neither, it is a Trust Company charter.

...which is odd because according to FinCEN (the federal government) Bitcoin exchanges are money transmitters. But a money transmitter could be any company so maybe it's not so odd. These laws are an absolute mess is the lesson here.

someone has to develop at the federal level a "kernel" for financial institutions.

i can dream, can't i?

Re: Bitcoin Exchange Receives First License in New York State

#20

Post by jsprogrammer »

sergiotapia wrote: post #18

It kind of sucks that Bitcoin being the poster-boy for free, anonymous currency free of government is still being pestered by governments. I guess Uncle Sam wants his cut!

Bitcoin is not anonymous; every transaction is recorded and public.
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