The Electronic Frontier Foundation explained their position in regards to New York’s proposed BitLicense on Wednesday, and the organization that is known for defending individual rights on the Internet did not have many kind words to say about the possible regulations.
The point of the post by the EFF was to reach out to their community and find people who would be willing to sends comments to the New York Department of Financial Services.
Rainey Reitman, the author of the post on the EFF’s website, made it clear that the BitLicense would not affect only Bitcoin business that wanted to operate in the state of New York, but also anyone in the general public who is interested in Bitcoin or financial privacy.
The Nightmare Scenario
Although it is unclear if Ben Lawsky or anyone else from the NYDFS has made similar claims, the EFF opened its piece with an example of how the BitLicense could affect average consumers in the future. The nightmare scenario depicts a situation where someone is asked to provide a large amount of personal identifying information to a coffee house because they’re attempting to purchase their coffee with cash. Bitcoin tends to fall into the same category as cash in many ways due to the fact that it is much harder to track everyone’s financial activity when these forms of payment are used.
Will This Nightmare Come True?
Although merchants who are accepting Bitcoin payments directly do not have to collect any information about their customers, the reality is that the nightmare scenario illustrated in the article would essentially be true if Bitcoin payment processors, such as Coinbase and BitPay, are required to collect customer data. The most troubling aspect of this setup may be that every customer’s financial data must be stored for at least ten years.
Make sure to read Rainey Reitman’s full article on the EFF website to understand their full list of complaints.
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Images from EFF and Shutterstock.