In a new statement from New York Superintendent of Financial Services, Benjamin M. Lawsky, the state is now officially accepting applications for digital currency exchanges. The new exchanges will be regulated under still-forming rules that Lawsky plans to have in place by this summer.
The move for additional virtual currency regulation in New York is not unexpected, and Lawsky has repeatedly hinted at the coming rules. The move is the first substantial state-level regulation of Bitcoin in the U.S., and the eventual framework may prove to be a model for how other states handle cryptocurrency-related banking and investment.
Today’s public order is the next phase in NYDFS’s public inquiry into the appropriate regulatory guardrails for virtual currency firms. NYDFS is continuing to work on regulations – including a specially tailored “BitLicense” – for virtual currency firms operating in New York. NYDFS is also expected in the near future to consider proposals and applications for other types of virtual currency firms beyond exchanges.
Several Bitcoin-based startups, such as New York’s SecondMarket, are expected to file for recognized status. Given the massive blowback from the collapse of completely unregulated exchange Mt.Gox, many in the investment world will welcome a state-sanctioned, decidedly legal business, even at the cost of some of Bitcoin’s current flexibility.
As Lawsky noted in the press release:
The recent problems at Mt. Gox and other firms further demonstrate the urgent need for stronger oversight of virtual currency exchanges, including robust standards for consumer protection, cyber security, and anti-money laundering compliance. We will continue to proceed swiftly and thoughtfully to provide rules of the road for reputable virtual currency firms seeking to conduct business on-shore in a responsible manner.”