Digital rights advocacy group the Electronic Frontier Foundation (EFF) is supporting privacy, free speech and innovation through a new email campaign opposing New York’s proposed BitLicense.
The EFF has crafted a pre-written letter for supporters to sign and send to the New York Department of Financial Services (NYDFS) and its leading supervisor, Superintendent Ben Lawsky. The letter argues that premature regulation stifles innovation, and that because of this, the BitLicense could adversely affect the bitcoin and digital currency industry should it pass in current form.
However, the EFF mostly asserts the consequences the passage of the law could have for society at large – not just bitcoin businesses and users.
In a post to the EFF blog yesterday, activism director Rainey Reitman expounded on the ways the BitLicense affects everyone’s financial privacy, writing: “The NYDFS is letting the fear of money laundering drive a massive regulatory proposal forward that would affect users who are doing nothing wrong. NYDFS should respect the privacy of technology users, and limit its regulation to what is proportionate to the real threat at hand.”
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Reitman emphasized the larger implications of the BitLicense, arguing that, regardless of any regulatory body’s view on bitcoin, the BitLicense is problematic because it could be applied more widely to other innovations. “We really don’t know what tools will be built on the bitcoin protocol for years to come, and the proposal that the NYDFS has put forward doesn’t have any carve-outs for non-financial services that are using the bitcoin protocol,” Reitman said.
Reitman wrote that people affected by the BitLicense proposal fall into two groups: those who will require a BitLicense and those who don’t but may still be affected by it.
Although the law wouldn’t affect digital currency users specifically, it would mandate affected companies keep 10-year records on all parties in each transaction, including the amount, date and time of the transactions as well as the total amount feed and charged to or on behalf of the licensee.
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Reitman argues that digital currencies like bitcoin endeavor to “recreate some of the censorship-resistant and privacy-protecting attributes of cash”. However, the records each licensee will be required to keep would also include such personal data and identity information as the full names of the transaction parties, account numbers and physical addresses.
“This would, in effect, threaten the possibility of having any cash-like interactions in the digital world,” she said.
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