California Assembly Moves Forward With Idiotic Plan To Make All Bitcoin Startups Apply For A License

by Mike Masnick
Techdirt
May. 02, 2015

Back in March, we wrote about a really bad bill that had been proposed in California by Assemblymember Matt Dababneh, called AB 1326. As we noted, it would basically destroy the ability of new startups in the Bitcoin space to build their businesses in California. Specifically, it would require any startup in the broadly defined "business of virtual currency" to first need to get licensed by "the Commissioner of Business Oversight" and then comply with a long list of other regulations -- including regular audits by the Department of Business Oversight. Well, unless you're a big bank or financial institution. Then you can carry on and experiment with Bitcoin all you want.

In short, the bill would reverse decades of how Silicon Valley has lead the world in innovation -- by switching from a world of rapid innovation and permissionless innovation, to one in which any startup even contemplating doing anything with Bitcoin would have to go plead their case to clueless regulators in Sacramento. It's hard to see how anyone could possibly think this is a good idea for innovation or the California economy. And yet... the assembly's committee on banking and finance has now voted the bill out of committee, sending it on to the appropriations committee and then on to the floor of the legislature.

Of course, perhaps it's not so surprising that the committee on "banking and finance" would approve this bill -- considering it gives a free pass to big banks and financial services companies while hindering startups, entrepreneurs and innovators. However, any of the many startups in California that are doing some amazing and interesting things with Bitcoin should speak up now, because California is about to tell them to move out of the state entirely.












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