New Jersey Introduces New Bill to Regulate Crypto Companies

A lawmaker has proposed a new crypto bill in New Jersey. It would require all crypto companies to obtain a business license to operate in the state. According to public records, the bill has been referred to the New Jersey Assembly Financial Institutions and Insurance Committee. The bill will protect consumers looking to invest in cryptocurrency while allowing the industry to grow and expand in New Jersey.

25 February, 2020 | AtoZ Markets – Assemblywoman Yvonne Lopez introduced a new bill (Digital Asset and Blockchain Technology Act) on February 20. New Jersey introduced the new crypto bill as the state has no clear regulations for the growing crypto industry. Moreover, the bill aims to make compulsory registration of all crypto companies with the Department of Banking and Insurance or any other state.

Bill Requiring Crypto Firms to Obtain License

The legislation would create consumer-friendly protections. Crypto companies have to disclose their legally registered names, AML and ATF policies, their license and legal history to the Department of Banking and Insurance. Companies must also disclose:

  • A list of any revocation of license, suspension, rejection or other disciplinary measures taken against the applicant.
  • A list of criminal convictions, prosecution agreements, and ongoing criminal proceedings.

However, Bitcoin regulation has not been fully addressed in the United States. Although the largest wave of bitcoins occurred more than three years ago, there were no state regulations regarding cryptocurrency in New Jersey. Unlicensed crypto operators had to try at the federal level by the Ministry of Justice. Lopez is a lead sponsor of the bill in the state assembly. She stressed the need to address these issues at the local level:

"Across New Jersey, there are ATMs that distribute bitcoin. People see and hear about cryptocurrency in their daily lives, but most are not sure what it is. We must take steps to protect consumers who are looking to invest in the cryptocurrency while allowing the crypto industry to grow and expand in New Jersey."

Read More: Bitcoin May Benefit African-Americans Community

Inform Consumers Regarding Potential Crypto Market Risks

The bill also requires crypto companies to disclose their terms of use for consumers and protected by the Federal Deposit Insurance Cooperation (FDIC). It is just like traditional bank account holders. Anyone making a request must provide a fee schedule and any information regarding the risks associated with investing in digital assets. Lopez said:

"Consumers will be better informed of the risks involved when they invest in virtual currency due to this legislation".

New Jersey would join its neighbor to New York by requiring cryptocurrency companies to obtain special authorization to operate. In 2014, New York financial regulators introduced BitLicense. However, it was one of the strictest jurisdictions in the Union for Crypto businesses. It was also mandatory for any crypto company offering services to residents of the state. However, many large companies have even left the state, deeming it too harsh for the industry.

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