The department will monitor emerging financial technologies. It will be responsible for granting licenses, including those approved by BitLicense.
The New York State Department of Financial Services (NYDFS), the New York State financial regulator, is moving its internal cryptocurrency business supervision team to a new division.
In a statement issued on Tuesday, July 24th, 2019, Linda Lacewell, the newly appointed superintendent, announced that the Research and Innovation Division at the Department of Financial Services will track emerging financial technologies and will be responsible for granting licenses and monitoring cryptocurrencies.
In response to a request for comment, the agency said that this will include the approval of licenses granted by BitLicense, a regulatory regime that governs companies that buy, sell or issue cryptocurrencies to consumers in the state of New York.
The NYDFS explained that this division will monitor the cryptocurrency licensing process and encourage development in this area.
Lacewell’s predecessor, Maria T. Vullo, opposed regulatory experimentation for non-bank financial companies when she ran the agency, marking this research and innovation division as a reprieve to the formerly heavy hand of the regulator.
Regarding the regulatory landscape of financial services, Lacewell said that it must evolve and adapt as innovation in banking, insurance and regulatory technology continues to grow.
The NYDFS was regulating companies in the cryptocurrency space in the year 2015, when its BitLicense program went into effect. The regime has been attacked by industry entrepreneurs, including ShapeShift CEO Erik Voorhees. He once said that despite being only two miles away from the Statue of Liberty, people cannot sell CryptoKitties in the state without that license, which he considers to be absurd.
According to the reports, the agency only granted eight BitLicenses in the first three years after its implementation. Currently, more than 20 licenses have been granted to cryptocurrency firms.
Lacewell recently approved two subsidiaries of the cryptocurrency exchange Seed CX, which will operate in the state of New York under the BitLicense framework.
Four executives were appointed in the announcement, all with a background in government jobs.
At the helm of the organization is Executive Vice-Superintendent Matthew Homer, who most recently worked on the launch of Fintech Plaid.
The current research director Olivia Bumgardner will also join the division as deputy superintendent. During her tenure at the state financial control agency, she has led initiatives that involve crypto assets and cybersecurity. Matthew Siegel, attorney for the Antitrust Division of the US Department of Justice, will act as a deputy superintendent, and Andrew Lucas, director of the Office of Financial Innovation, will act as an attorney.
Regarding these appointments, Lacewell said that this new division and these appointments position the Department of Financial Services (DFS) as the regulator of the future, which will allow the Department to better protect consumers, develop better practices and analyze market data to strengthen New York’s position as the center of financial innovation.
To conclude it can be said that the world of cryptocurrency trading has been growing significantly, which leads to the implementation of organizations that regulate transactions conducted through emerging financial technologies
By Willmen Blanco