New York has become the first jurisdiction to finalize rules over Bitcoin and other virtual currencies. The new rules are aimed at protecting customers, but many say the state's new rules could stymie innovation.
State regulators worked for two years to develop rules that would prevent criminals from using virtual currencies. Virtual banks are now required to record and make available every transaction a customer makes. Traditional banks only have to do that for transactions of a certain size. Peter Van Valkenberg, director of research at Coin Center, a virtual currency lobbying firm, called this discriminatory and burdensome.
"And if other states were to follow suit you could have 50 different, unique, slightly different compliance obligations," he said.
Some investors in the industry, however, praised New York for providing oversight and trust where it didn't exist before. The new rules only apply to virtual currency customers in New York.
