California Assemblyman Matt Dababneh has blasted the Electronic Frontier Foundation (EFF) for spreading false information against his Bitcoin bill, AB-1326.
Last week, the said Bitcoin advocacy group had called the Californian Bill “premature and technically inaccurate”, saying that its significant fees and administrative hurdles would clamp down the growth of young Bitcoin startups in the state. EFF further called out for a no-regulation scenario, for it believed that the digital currency industry is still too young to be regulated.
Replying to the criticism, assemblyman Dababneh called EFF an organization that has little knowledge in the area of financial regulation. In his opinion, the Bitcoin group lacks insights to understand the risks associated with a no-regulation scenario. He said in a statement:
“EFF has little expertise in the area of financial regulation and is generally beyond its depths on the appropriate levels of safety and soundness regulation required of financial service providers.”
He continued: “EFF claims that it’s too early to regulate virtual currency. In the last several years consumers have lost over half a billion dollars in virtual currency scams and data hacking. What exactly is the dollar amount necessary for consumers to lose for it to be appropriate to regulate companies that hold virtual currency?”
The very Bitcoin bill treats Bitcoin companies like any other company, Dababneh added.
“If you hold value for a consumer, then the consumer must have protection and potential redress if something goes wrong.”
AB-1326 is Not BitLicense
The lawmaker also rubbished EFF for equating AB-1326 with BitLicense, which is considered as one of the most stiffest Bitcoin bill today. In his statement, he called AB-1326 a friendlier bill than its New York counterpart, saying that their bill, unlike BitLicense, has exempted backend software companies from obtaining the license.
“That is why AB 1326 really creates the opportunity for California to become the next stop for virtual currency companies looking to leave New York.”