Three of the biggest bitcoin exchanges in China teamed up on Thursday to release a joint letter addressed to New York regulators, warning them that proposed rules for the digital currency will have far-reaching consequences.
In the joint correspondence, signed by the CEOs of BTCChina, Huobi and OKCoin, the three companies argue that the proposals - which involves the issue of a "BitLicense" by New York State authorities - are too broad and that new rules should only apply to businesses with meaningful connections to the region.
"While we are companies organized under the laws of the People's Republic of China, we believe that it is not only appropriate, but also necessary for us to express our thoughts on certain aspects of the BitLicense proposal," the letter said.
Their belief is that New York regulation could affect global exchanges as the virtual currency is decentralized and because regulations in New York have long been given great respect and thus have the capability of influencing similar moves by other jurisdictions.
The three companies are wary of the idea that a license would allow the New York State's Department of Financial Services access to information from both the companies and their affiliates. A license holder's affiliates should be allowed to only disclose relevant information to the authorities, the letter stated.
They also see problems regarding the proposed requirement that licensed firms need to perform "enhanced" customer checks on non-U.S. residents. They believe that these checks should be related to whether the customer and the applicable licensee are from the same jurisdiction, and not just on whether the customer is a U.S. person.