The New Jersey state legislature is now considering a new bill requiring cryptocurrency businesses to get a proper operating license.
The Digital Asset and Blockchain Technology Act was proposed by Assemblywoman Yvonne Lopez on 20 Feb. By requiring crypto companies to disclose their legally registered names, Anti-Money Laundering (AML) and Anti-Terrorist Financing (ATF) policies, the legislation would establish new requirements for virtual currency businesses and create consumer friendly protections, and their licensing and legal history to the Department of Banking and Insurance of New Jersey.
Cryptocurrencies Not Yet Regulated In The States
Although the largest Bitcoin surge occurred over three years ago, New Jersey did not have any state regulations surrounding the cryptocurrency. Unlicensed crypto operators, through the Department of Justice, had to be tried at federal level. Lopez stressed the need to tackle these problems locally:
“People see and hear about [Bitcoin] in their day-to-day lives, but most are not quite sure what it is. We must take steps to protect consumers looking to invest in cryptocurrency, while also allowing the sector to continue to develop and expand in New Jersey.”
The bill also requires that crypto firms to disclose their terms and conditions for consumer accounts, and that they are protected by the Federal Deposit Insurance Cooperation (FDIC), as are account holders in traditional banks. Any applicant would have to provide a fee schedule, and any information about the risks of investing in digital assets.
“With this legislation, consumers will be better-informed of the risks involved when investing in virtual currency.”
New Jersey would join its neighbor New York by introducing a state-level licensing scheme in requiring crypto-currency firms to obtain special permission to operate. New York financial regulators introduced the BitLicense in 2014 making it one of the Union’s toughest jurisdictions for operating cryptocurrency-related firms.