The redraft levies a $5,000 nonrefundable application fee on industry applicants, and the formidable application process asking for a wealth of information, and significant capital requirements for industry participants, still remain. In addition, a notable improvement is that bitcoin companies would be allowed under Bitlicense 2.0 to keep their required capital in a variety of instruments including virtual currencies as well as cash. Bitlicense 2.0 junks the absurd original proposal that mandated licensees be "permitted to reinvest its retained earnings and profits" in only short-term cash equivalents or United States government debt. This allows bitcoin "banks" to use digital currency to meet part of their net capital requirements, and starts the move towards banking using digital currencies and the move away from vaults holding just the digital currency. It isn't perfect, it isn't true leverage, it doesn't allow an expansion of the money supply, but it is a start.
Bitlicense 2.0 also retains the problematic overreach from its expansive definition of "New York Person." The term is defined to cover anyone with any physical presence in the state. The revision further retains the burdensome reporting and recordkeeping provisions on cybersecurity, on the know your customer, anti-money laundering and suspicious activity reporting requirements and on any customer accounts for seven years.
Virtual Currency Business Activity means the conduct of any one of the following types of activities involving New York or a New York Resident: (1) receiving Virtual Currency for Transmission or Transmitting Virtual Currency, except where the transaction is undertaken for non-financial purposes and does not involve the transfer of more than a nominal amount of Virtual Currency; (2) storing, holding, or maintaining custody or control of Virtual Currency on behalf of others; (3) buying and selling Virtual Currency as a customer business; (4) performing Exchange Services as a customer business; or (5) controlling, administering, or issuing a Virtual Currency. The development and dissemination of software in and of itself does not constitute Virtual Currency Business Activity.