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New York to Bitcoin Startups: Get Permission

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Re: New York to Bitcoin Startups: Get Permission

#41

Post by DINKDINK »

DINKDINK wrote: post #40

These regulations aren't about consumer protections (if they were, companies would be audited and scored on how well they comply, ala health food scores in restaurants). If regulators solely marked businesses with the metaphorical seal of approval, a democratic, economic process would happen in the market place. This is entirely about the state inserting themselves between people, their money, and where they want to…

Further more, to quote Greg Brockman:

"Second, this model [the Bitcoin ecosystem] unbundles the existing financial system into layers run by independent companies. To see the value of this, contrast with the US mobile carriers, who used to own the entire stack. They owned the handsets, the operating systems, the applications running on the phone, and the service. This meant that most of the stack never had anything pushing it to get very good, and there were even incentives to hold it back in order to preserve legacy revenue-generating facilities like SMS. By enabling competition at individual layers of the financial system, each one should improve."

The big banks of NY are threatened by Bitcoin and are working with the same people/regulators they've rubbed elbows for so long. If regulators really cared about protecting consumers they would have prosecuted big banks for the biggest destruction in wealth in human history aka the 2008 financial crash.

Re: New York to Bitcoin Startups: Get Permission

#42

Post by aburan28 »

patio11 wrote: post #34
sliverstorm wrote: post #32

Earlier quoted context omitted.

They are a little dated these days of course, but off the top of my head fingerprints are used for banking, old fashioned wire transfers, and passports. They want to be able to connect you to those things, and the fingerprint was the private key signature [1] of the 20th century. Which, IMO, isn't "so 1984" because those are historically all major fraud avenues. [1]: http://en.wikipedia.org/wiki/Digital_signature

off the top of my head fingerprints are used for banking, old fashioned wire transfers, and passports Fingerprints are not routinely collected in the United States to open bank accounts, send or receive wire transfers, or request passports.

I have never given fingerprints to open a bank account

Re: New York to Bitcoin Startups: Get Permission

#43

Post by georgemcbay »

sliverstorm wrote: post #39
patio11 wrote: post #34

Earlier quoted context omitted.

off the top of my head fingerprints are used for banking, old fashioned wire transfers, and passports Fingerprints are not routinely collected in the United States to open bank accounts, send or receive wire transfers, or request passports.

Has policy changed? I could swear I had to give a fingerprint last time I opened a bank account in person, and when I got my passport. I suppose that was fifteen years ago...

The only time I've ever been fingerprinted is for a license renewal at the California DMV, and I have a passport, a bank account, etc.

AFAIK there has never been a fingerprint requirement for US passports.

Re: New York to Bitcoin Startups: Get Permission

#44

Post by avz »

fred_durst wrote: post #16

> 1. Submit fingerprints of all founders (and employees) to the FBI and disclose personal financial information of founders and officers to NY State. > 2. Require them to hold an undetermined amount of U.S. dollar funds in bonds or trusts. Startups will not be able to predict the bonding or capitalization requirements until after they apply, making it difficult to project expenses or raise money. > 3. Conduct expensi…

Fingerprints requirement sounds a bit ludicrous. Is this standard practice applied to other financial services companies?

Capital requirement is misplaced: Bitcoin startups are not generally fractional banking institutions. Also, they operate in Bitcoin, so why demand they hold assets denominated in USD? It's not like the customers can come back demanding to sale their Bitcoin at the same exchange rate they bought it at.

Audits and security testing sound perfectly appropriate.

Inactive assets handover also seems appropriate since it provides the most efficient way to manage and ultimately return abandoned property to its rightful owner.

Re: New York to Bitcoin Startups: Get Permission

#45

Post by samstave »

avz wrote: post #44
fred_durst wrote: post #16

> 1. Submit fingerprints of all founders (and employees) to the FBI and disclose personal financial information of founders and officers to NY State. > 2. Require them to hold an undetermined amount of U.S. dollar funds in bonds or trusts. Startups will not be able to predict the bonding or capitalization requirements until after they apply, making it difficult to project expenses or raise money. > 3. Conduct expensi…

Fingerprints requirement sounds a bit ludicrous. Is this standard practice applied to other financial services companies? Capital requirement is misplaced: Bitcoin startups are not generally fractional banking institutions. Also, they operate in Bitcoin, so why demand they hold assets denominated in USD? It's not like the customers can come back demanding to sale their Bitcoin at the same exchange rate they bought it…

Fingerprints are required so that when they find a stolen bitcoin, they can dust it for prints to see if any of the founders were involved in its theft. That's pretty straightforward.

Re: New York to Bitcoin Startups: Get Permission

#46

Post by samstave »

fred_durst wrote: post #16

> 1. Submit fingerprints of all founders (and employees) to the FBI and disclose personal financial information of founders and officers to NY State. > 2. Require them to hold an undetermined amount of U.S. dollar funds in bonds or trusts. Startups will not be able to predict the bonding or capitalization requirements until after they apply, making it difficult to project expenses or raise money. > 3. Conduct expensi…

>>4. Hand over any untouched user assets to NY State after five years as “abandoned property.”

So if you hold bitcoin in an account for 5 years, the state will steal it from you by force?

Re: New York to Bitcoin Startups: Get Permission

#48

Post by throwaway2274 »

nmrm wrote: post #21
Ryan_Singer wrote: post #18

Earlier quoted context omitted.

There is a difference between: * Coinbase: A startup that holds millions of dollars worth of bitcoin for mostly consumers * The reddit tip bot: a non-profit community tool that explicitly discourages holding more than a dollar or two * Blockchain: A startup that holds no money for anyone, but writes and serves software that helps people hold their own money online. Do you think all three of these groups should go thr…

Professional auditing and security testing should be necessary for any piece of software from which it's possible to drain large sums of money, regardless of who's running the software or holding the money. In fact, I'd argue anything less constitutes an ethical breach on the part of the lead engineer(s). I'm not really sure why that particular regulation is so onerous in any of these situations, since any responsibl…

> Professional auditing and security testing should be necessary for any piece of software from which it's possible to drain large sums of money, regardless of who's running the software or holding the money. In fact, I'd argue anything less constitutes an ethical breach on the part of the lead engineer(s).

Would you include web browsers, OSs, system libraries and such in that definition? All those can steal users money if compromised. If so, who do you suggest be responsible for that in an open source project?

Re: New York to Bitcoin Startups: Get Permission

#49

Post by starkness »

fred_durst wrote: post #38
starkness wrote: post #28

Earlier quoted context omitted.

We're in the process right now of writing up a more in-depth policy proposal, but you're spot on in terms of different levels of risk management. And we're not at all against security testing, which is also one of the great benefits of FOSS. ("Given enough eyeballs, all bugs are shallow.") And the audits comprise financial audits as well, which surely make sense for bitcoin exchanges and companies holding funds, but…

> Given enough eyeballs, all bugs are shallow. Tell that to OpenSSL.

Or tell that to Linus Torvalds, as it's his law.

Re: New York to Bitcoin Startups: Get Permission

#50

Post by starkness »

fred_durst wrote: post #36
starkness wrote: post #30

Earlier quoted context omitted.

And one of the key questions is, does this make sense for, say 1000 abandoned dogecoin (current value $0.24) on tipdoge.info? This is why we proposed de minimis exceptions.

Absolutely, 100% it does. Because it helps to prevent a business from building its profit model around 100,000 people abandoning $1 each.

Policy is always about tradeoffs. Is it your stance that the creator of Reddit tip bots should have to register fingerprints with the FBI, hand over personal financial info, send quarterly reports with to the Superintendent with audited financial statements, collect the real identities and physical addresses of all senders and recipients, assign a compliance officer, hire an outside firm to do pentesting, get permission before releasing a new product, service, or features, and have an undisclosed amount of USD funds bonded to NY State along with an undisclosed amount on hand just to operate a simple app? What about open source projects that are not corporations?
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