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New York Becomes First State to Propose Regulations for Bitcoin

With the proposed virtual currency guidelines, New York regulators hope to curb money laundering and safeguard bitcoin investors,
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New York has become the first state to propose guidelines for regulating bitcoin and other virtual currencies. The special set of rules for firms involved in trading and storing virtual currencies is an attempt by state regulators to curb money laundering and safeguard investors. New York City is home to several startups dealing in bitcoin, and some Wall Street firms are edging into the field as well. The proposal Thursday by the state Department of Financial Services would establish a so-called BitLicense. Merchants and consumers who use bitcoin solely to buy and sell goods and services wouldn't need the license, but those buying and selling virtual currency as a business would. The proposals will be open to a 45-day public comment period starting July 23.

The Bitcoin Foundation, a nonprofit organization that promotes the currency, questioned whether separate regulations were warranted. It suggested operators should instead be integrated into existing financial regulations.

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— The Associated Press and NBC News staff