
Bitcoin Exchange Receives First License in New York State - verkter
http://www.nytimes.com/2015/05/08/business/dealbook/bitcoin-exchange-receives-first-license-in-new-york-state.html?ref=dealbook
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Animats
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.

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reviseddamage
How does one ensure Bitcoins?

~~~
Adlai
At the rate agreed upon by the purchaser and insurance provider. The
considerations are different than those of insuring gold or dollars, but to an
actuary, they're all just probabilities.

~~~
derefr
I think the question was more, _with whom_ does one ensure Bitcoins? Has any
insurance provider stepped up and said that they have a solid-enough picture
of Bitcoin's risks to know what premium to charge?

~~~
pash
Many of the big web-wallet providers, exchanges, and other custodians insure
their customers' Bitcoin holdings against theft. Their insurers include Aon
(who insure Coinbase), Lloyd's (Elliptic), Marsh (Circle), and XL Catlin
(BitGo).

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vessenes
This is huge for the itBit team; they've been cranking away on this quietly
for a couple of years at least; it's been expensive and time consuming.
Congrats.

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thinkcomp
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.

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

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thinkcomp
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 to start handing out state bank charters
to virtual currency operators when typical money transmitters don't qualify
due to their [much lower] risk profile.

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PierreRochard
See here:
[http://www.dfs.ny.gov/about/press2015/pr1505071.htm](http://www.dfs.ny.gov/about/press2015/pr1505071.htm)

~~~
thinkcomp
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?

~~~
reviseddamage
>>Can a typical money transmitter just pretend to handle Bitcoin as well and
magically exempt itself from the state money transmission framework?

It has restrictions and depending on how the Trust was constructed, it may not
be applicable in other states for certain transmission activities.

>>Do other states consider this kind of trust company to be a bank or a money
transmitter?

They evaluate what the Trust was built for,and what the company wants to do in
their state, and evaluate whether there is a delta or overlap.

>>What does FinCEN think?

no diff, still have BSA/AML obligations and commitments.

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sergiotapia
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!

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

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DINKDINK
>Bitcoin is not anonymous by default; every transaction is recorded and
public.

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NeutronBoy
Bitcoin is more _pseudonymous_ than anonymous: you can trace the transactions
of an identity, but there's nothing inherent about that identity that links it
back to IRL unless theres additional information

