New York's "Bitcoin License" slows down Bitcoin development and makes startups go somewhere else. London and Zug (Switzerland) are much more crypto-friendly. New York might be missing a big opportunity here.
So an exchange who lost a significant amount of money in a hack recently is vocally opposed to a license that requires exchanges to perform security audits and to stay solvent?
I know this "BitLicense" is technically different than the more general licensing requirements for "money transmitters." But FinCEN compliance is a regulatory nightmare. The process of licensing as a "money transmitter" is slow, expensive, and done on a state-by-state basis. The "money transmitter" classification [0] is very broad, and effectively qualifies any middleman as one. Keep in mind these are the same licenses that businesses like banks and brokerages need to get.
The regulatory compliance process is so expensive and complex that even large companies sometimes delay getting the proper licensing. Facebook, which qualifies as a money transmitter due to its payments system, and operates in all fifty states, at one point had licenses in only fifteen of them. [1] So technically Facebook was operating as an unlicensed money transmitter for multiple months.
Also see a quora answer for some personal anecdotes (behind FB nag wall). [2]
And I'm a big fan of the article "money laundering is financial thoughtcrime," posted to HN a while back. [3]
