New York Regulator Lays Out Tweaks to Bitcoin Rules

New York state plans to soften proposed rules for virtual currencies such as bitcoin, its banking regulator said on Thursday, after receiving a round of public comments.

Start-up companies dealing in the budding technology could get a two-year partial waiver from complying with the full set of rules to help them continue their business, New York Superintendent of Financial Services Ben Lawsky said.

The revised rules for obtaining the so-called BitLicense, which will be posted for a new round of comments in the coming days, would reduce the record-keeping requirements to seven years from 10 in the original proposal.

Companies applying for a license also could count virtual currencies toward their capital requirements, Lawsky said.

The new rules would not apply to software developers, individual users, customer loyalty programs and gift cards, currency miners, nor to merchants accepting it as a payment, Lawsky said in a speech in Washington.

Unlike conventional money, bitcoin is independent of control or backing by any government - something its advocates like but that has also led to calls for more oversight and raised questions as to how to treat it for tax purposes.

Bitcoin started circulating in 2009 and is accepted as payment by a small but increasing number of companies. Huge swings in its value and incidents where clients lost millions of dollars have hurt its reputation.

(Reporting by Douwe Miedema; Editing by Bill Trott)