ConsenSys, a leading Ethereum-focused software company, is facing scrutiny from the blockchain community regarding its lack of a BitLicense to operate in New York State.
To provide some context, the BitLicense is a business license that’s required by New York for companies conducting “virtual currency business activity,” which involves storing, holding, or maintaining control of virtual currency on behalf of others. It was instituted in 2015 to regulate cryptocurrency activities and protect consumers.
On October 13, blockchain investigator Mr. Huber posted questions on how ConsenSys has been able to avoid obtaining a BitLicense, given its extensive involvement in the Ethereum ecosystem, via two posts on X (formerly Twitter).
How is it possible that @ConsenSys doesn’t have or need a BitLicense? Clearly they are involved in virtual currency activities? Just think about Token Foundry or litteraly anything they do? @JohnEDeaton1 @Marc_Fagel @StevenNerayoff pic.twitter.com/h2FPAwK34a
— Mr. Huber🔥🦅🔥 (@Leerzeit) October 13, 2023
In one of the two posts, Huber questioned the absence of a BitLicense for ConsenSys, given their involvement in virtual currency activities, including Token Foundry and other related ventures.
Token Foundry was a startup incubated by ConsenSys in 2018, with an aim to establish itself as a prominent platform for conducting initial coin offerings (ICOs). As a company involved in releasing and selling tokens, it would appear to fall under the purview of entities required to obtain a BitLicense.
In a separate post, Huber observed that ConsenSys had actively attempted to “improve” the BitLicense, raising the question of why they had never obtained one themselves.
Consenys is quite active in the crypto realm. Moreover, Bill Hughes, the company’s attorney, clarified in a post that the company has officially submitted a request for an extension of the deadline concerning the IRS broker crypto reporting standards.
Today, @Consensys submitted a short letter to the staff at @USTreasury and IRS who are working on the notice of proposed rulemaking concerning the IRC Section 6045 broker reporting requirement. That letter requested two things:
First, due to the complexity of the proposed… pic.twitter.com/tX9hZpkOOg
— Bill Hughes : wchughes.eth 🦊 (@BillHughesDC) October 9, 2023
Hughes made the announcement on Monday, stating that ConsenSys has sent a letter to the Internal Revenue Service (IRS) and the U.S. Department of the Treasury, seeking two substantial modifications to the proposed regulations.
However, ConsenSys has not publicly responded to the implication that it may be in violation of New York’s registration requirements. With blockchain transparency proponents like Huber digging in, ConsenSys may soon have to answer tough questions.
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