https://thecapital.io/article/an-open-letter-to-bloomberg-on-modern-bitlicense-logic--MMvQpMQ0EbzeqKBTjBZ
> Dear Bloomberg: > > Thank you for pioneering innovation spanning all facets of global finance. > > For the last 15 years, Bloomberg has served as a wise friend offering > daily, quality inspiration. Interviewing Mayor Mike Bloomberg on occasion > as a young journalist and advancing to become a global executive and > regular Bloomberg Breakaway attendee has fostered a dream of learning from > top global business idols. > > Forever inspired by Bloomberg’s pioneering contributions to the culture of > New York and global financial innovation, today’s memo highlights our now > eventful journey to fundamentally modernize New York's BitLicense and > global regulatory logic. > > - > > Our global team > > <https://drive.google.com/file/d/1S3hI4G7QYR7PmlKlc7oQHhl4RnroLYF-/view?usp=sharing> > is > comprised of seasoned professionals who cumulatively represent decades of > industry experience across various fields and disciplines. > - > > Our strategic partnerships > > <https://news.bitcoin.com/ternio-joins-visas-fast-track-program-as-new-enablement-partner/> > with > the world’s leading financial, healthcare services <http://mydr.co/> and > mobile payments providers support the key aim of our endeavor: to attain > the legitimate financial inclusion and economic prosperity of all the > excluded, under-privileged and under-served, offering financial inclusion > and global citizenry. > > Pioneering global virtual currency innovation is in part due to pedigree > responsibility as a “Bill and Melinda Gates Scholar,” (UG) a “Blockchain > Scholar” (GR) and a principle creator of “United Nations AudioVisual > Library on International Law > <https://drive.google.com/file/d/0BweeaClFZ8c0dDNDWGFveVFTXzlOTjhXY2tKS2FZN2VKc2VN/view?usp=sharing>.” > Humble scholars and UN esteem are indeed supportive. However, our working > example of success is modeled on Bloomberg's business of international > excellence, pioneering many of the world's greatest financial systems and > technology frameworks out of New York. > *The New York BitLicense vs. Global Regulatory Arbitrage* > > The 2015 BitLicense mandate was envisioned as synonymous with New York’s > leadership of next-generation global innovation. New York’s contemporary > virtual currency innovation rests with a modern BitLicense with > cross-border logic (similar to New York human rights law > <https://dhr.ny.gov/law#HRL298a>). > > 1. > > Today many New York firms have various legacy regulatory arbitrage > frameworks. > 2. > > The utility concept behind virtual currency is in its cross-border > appeal. > 3. > > Modern European regulation shares this logic. New York’s BitLicense > does not, therefore creating a virtual currency “Crypto Bank” regulatory > arbitrage loophole between Europe and New York. > > New York banks’ traditional engagement of regulatory arbitrage has > overflowed the BitLicense and correspondingly is responsible for global > virtual currency marketplace manipulation. Circumnavigating this problem is > key to modern BitLicense logic. Given the inherent universal cross-border > nature of virtual currencies, there is no real good reason for New York > firms under the BitLicense mandate to manipulate other global markets via > regulatory arbitrage. > > Engaging the New York Department of Financial services’ new “Conditional > BitLicense” framework as a vehicle, we have signed our clear intent to win > the Superintendent's Conditional Approval and other necessary regulatory > approvals of modern virtual currency logic. > > - > > BitLicense members today should not be surprised by New York wasting > no time issuing modern logic and that virtual currency regulatory arbitrage > is a lawless New York rights concern affecting > <https://dhr.ny.gov/law#HRL298a> over 1 billion people. > - > > European regulation has allowed our team to build these concepts which > are theoretically illegal in New York, thus creating global loopholes. > - > > Africa is the most concerning “virtual currency regulatory arbitrage > market” directed outside of New York and Europe jurisdictions. African > consumers are being manipulated most. United States consumers also are > affected at various levels. European consumers have a favorable > environment, but do not have the “dynamism” New York affords. > > Working in New York, European and African jurisdictions as “Blockchain > Scholars,” we tested the concept of our Modern BitLicense Logic at our > “sister” University in Africa > <https://drive.google.com/file/d/1S3hI4G7QYR7PmlKlc7oQHhl4RnroLYF-/view?usp=sharing>, > and interestingly Goldman Sachs out of New York was a lead investor. > > The key observation is that New York banks “own,” or lead investment in, > the European and African marketplace leaders. At every level, New York’s > BitLicense is the most significant hurdle to the global virtual currency > industry. Given our own experience in these markets, we have found that > Goldman Sachs has fine tuned global virtual currency regulatory arbitrage. > To be fair, we have reported on various other Silicon Valley firms > leveraging the BitLicense, given that Valley firms like Robinhood > <https://thecapital.io/article/robinhoods-brand-fake-vs-paypals-crypto-corruption-MLic2ot6v5Vurqr5xBT> > use > New York banks, like Goldman Sachs, as a key actor. > > Note, as some of the industries top “real global scholars” we understand > it would be a mistake to be adversarial to the current New York > environment. Like Boomberg, we aim to be very impressive in terms of > successfully shepherding/persuading meaningful New York innovation. > *The Art of Diplomacy* > > Rather than a merry-go-round, the process of change is like a slide, and > Modern BitLicense Logic is necessary. As a matter of New York law, there is > no other option. The process of filing complaints or legal mediation is > sub-par. Furthermore, if virtual currency firms want to game regulatory > markets they honestly should forfeit the prestige of New York’s BitLicense. > > 2020 will go down in history as New York banks continued to profit heavily > under regulatory arbitrage frameworks while virtual currency reached global > proportions. New York’s newly announced “Conditional BitLicense” framework > offered our group the perfect opportunity to earn a “Conditional License” > and suggests advancing the BitLicense mandate with “modern logic.” > > - > > The interests ensured through interpretations of specific provisions > in the existing national and supra-national legal framework (civil law, > securities law, bankruptcy law, international human rights law) call for > New York to clarify the rights of the public and obligations of BitLicense > members engaged in the global virtual currency economy. > - > > BitLicense regulation must preserve a technology-neutral, > principle-based, non-discriminatory framework for the next generation of > modern New York virtual currency public policy, naturally to support > innovation within the limits imposed by overriding international public > interests. > > As a proud New Yorker, the only option is to be a “real scholar,” and the > job would not be complete without New York regulator approval and campaign > for cross-border modernization of the BitLicense logic in any way possible. > *Vast Undue Economic Hardship* > > Bloomberg has championed actions to promote an inclusive economy -- one in > which people have the chance to move themselves and their families out of > poverty, one in which systemic racism does not limit opportunities and one > in which all people can fully participate. Without this inclusivity, the > global economy will not be able to live up to its full potential and people > will suffer. > > As we have reported > <https://thecapital.io/article/new-yorks-raging-regulatory-arbitrage-racket----MLKEXnlOV4fWpOeq5tY>, > virtual currency fraud is a serious problem for such a developed country as > the United States, whose bank regulators have drawn attention to the > increase of these crimes. Having discovered that an unregulated virtual > currency sphere (such as in Africa, or other developing markets) is very > popular among virtual currency fraudsters > <https://www.americanbanker.com/news/jpmorgan-chase-warns-of-upcoming-fine-over-internal-controls>, > the New York State Department of Financial Services concluded that this > kind of regulatory fraud was threatening US national security. > > Research on the social importance and credibility > <https://thecapital.io/article/robinhoods-brand-fake-vs-paypals-crypto-corruption-MLic2ot6v5Vurqr5xBT> > of > good institutional design from an organizational perspective seeks to > prevent undue hardship requiring significant expense or difficulty > (including a significant interference with the safe or efficient operation > of international operations due to the seniority system of New York banks > who are playing global markets). > > - > > Factors to be considered in determining whether an undue economic > hardship exists shall include, but not be limited to, special requirements > or conditions that are imposed upon an applicant or class of applicants in > circumstances where similar requirements or conditions are not imposed upon > other applicants. > - > > Consumer protection is an umbrella term covering a group of laws and > organizations that protect the rights of consumers and foster the free flow > of accurate information in the marketplace. Consumer protection laws are > designed to prevent businesses from engaging in fraud or unfair practices, > to protect individuals from scam artists, and to identity thieves and > crooks. > > > - > > A New York State resident or corporation is in violation if found to > have contributed to an act committed outside New York State against a > resident of this state or against a corporation organized under the laws of > this state (or authorized to do business in this state) that would > constitute an unlawful discriminatory practice if committed within New York > State. > - > > If the New York State has reason to believe that a non-resident person > or foreign corporation has committed or is about to commit outside of this > state an act which if committed within this state would constitute an > unlawful practice, such act is in violation. > > Speaking generally, at least during its 2015-2020 implementation phase, > the BitLicense has likely contributed to increased cross-border virtual > currency market manipulation. Specifically, we reference our individual > hardship example in New York, Europe and Africa with concern to Goldman > Sachs’ cross-border manipulation as a violation of New York Human Rights > law. > *New York Human Rights Law* > > Our analysis of the factors that drive cross-border differences in the > implementation of BitLicense reform link the resulting heterogeneity to > cross-jurisdictional arbitrage. In this manner we identify New York in a > “virtual currency regulatory crisis” – to the extent that the BitLicense is > unevenly implemented – as a source of new and unchecked global financial > risk. Given the nature of traditional regulatory arbitrage, it is key to > differentiate the BitLicense and understand New York’s universal nature > <https://dhr.ny.gov/law#HRL298a> of Human Rights Law. > > - > > The science of pure virtual currency design and human rights are > universal movements to end ins > <https://en.wikipedia.org/wiki/Institutionalisation>titutionalized > <https://en.wikipedia.org/wiki/Institutionalisation> discrimination > and disenfranchisement > <https://en.wikipedia.org/wiki/Disenfranchisement_in_the_United_States>, > and to offer quality consumer financial product access without cross-border > regulatory segregation. > - > > We trust that virtual currency regulatory arbitrage can be addressed > via BitLicense modernization and that New York regulators share our logical > provisional interpretation of cross-borders with respect to human rights. > > Our experience in Europe and Africa points to the necessity to work with > New York regulators directly without BitLicense member interference. This > approach is not to purposely irritate the esteemed Superintendent or rock > the boat that is New York State and risk disrupting the system that > guarantees our future. > *Conditional BitLicense Approval* > > Modern BitLicense Logic’s opportunity is to meet a new global standard for > virtual currency regulatory innovation while protecting market integrity by > stringent standards applicable to all law-abiding business enterprises. In > our case, a few approvals are necessary and are proposed via a hybrid model > under the supervision of the Superintendent. > > Following this desire, we have navigated the five step process for > Conditional review. > > 1. > > *Inform*: Applicants inform NYDFS of the intent to collaborate with a > specific BitLicensee and provide a copy of the draft agreement between the > applicant and the BitLicensee. > 2. > > *Submit: *Applicants submit information on the expected type of > business and the perceived risks, among other things. > 3. > > *Review: *NYDFS begins its substantive review after all of the > requested documentation has been submitted. > 4. > > *Contract: *NYDFS and the applicant enter into a supervisory agreement > defining the scope of the applicant’s business, shared responsibilities > with its sponsor BitLicensee and NYDFS’ level of oversight. > 5. > > *Approve:* If NYDFS approves the application, a Conditional BitLicense > is issued. > > Every day of delay in ambiguity of Modern BitLicense Logic poses a problem > for those who want to offer additional products and services at > international scale while staying within the letter of the law. Currently, > we believe that our Conditional application is ready to enter stage four > and seek to begin negotiation of the supervisory agreement. > > Bloomberg as the prime example of global prestige and success fuels our > desire to be best in class in providing global virtual currency financial > services out of New York. > > Warm regards, > > *Gunnar Larson* > Bill and Melinda Gates Scholar | Blockchain Scholar > Conditional BitLicense Applicant (Global Team Lead) > New York, New York 10001 > > -- > *Gunnar Larson - xNY.io <http://www.xNY.io> | Bank.org <http://Bank.org>* > MSc > <https://www.unic.ac.cy/blockchain/msc-digital-currency/?utm_source=Google&utm_medium=Search&utm_campaign=MSc-Digital-Currency-North-America&utm_term=blockchain%20unic&gclid=Cj0KCQiAyJOBBhDCARIsAJG2h5ctwwMz0MRbVSk-LaYD-GMU5UgDSw7ynxbGr_a7SkaFAZzJc1-pzxEaAi4NEALw_wcB> > - Digital Currency > MBA > <https://www.unic.ac.cy/business-administration-entrepreneurship-and-innovation-mba-1-5-years-or-3-semesters/> > - Entrepreneurship and Innovation (ip) > > [email protected] > +1-646-454-9107 > New York, New York 10001 >
