As Benjamin M. Lawsky, New York Superintendent of Financial Services, faces a lot of criticism from Bitcoin stakeholders after he brought in the first draft of the state’s specialized BitLicense, he says that he will now bring in a lighter BitLicense. The top financial regulator suggests that it is willing to create a “transitional BitLicense” for startup Bitcoin companies.
According to Lawsky there will be lighter regulatory requirements than those required for more established businesses in the digital-currency industry for startup Bitcoin companies. Earlier, he came under intense criticism from Bitcoin companies for a heavy-handed approach as according to them this would quash innovation in the burgeoning financial technology sector.
Ben Lawsky is someone who has been appreciated for his flexible approach regarding Bitcoin regulation and this seems visible in the latest statement that he gave at the Money 20/20 conference in Las Vegas. He said that the New York Department of Financial Services last month received hundreds of comments regarding BitLicense.
Earlier, he gave a 90-day comment period following the release of the BitLicense draft in July and according to him one issue that his organization heard about consistently throughout the entire comment period is a concern about the compliance costs of regulation on new or fledgling virtual currency enterprises.
He admits that in a bid to ensure companies play by the rules without getting crushed by huge compliance costs, his organization is considering creating a special type of ‘Transitional BitLicense,’ which would allow certain small businesses and startups to operate within a more flexible framework for a set period.
Lawsky is committed to Protect Consumers
Ben Lawsky further cleared that during this transitional period, such firms would be subject to specially tailored examinations. According to him the NYDFS is also considering designating a small group of specialized examiners who can gain a greater understanding of the unique challenges smaller companies and startups face.
He is of the opinion that digital currency-based startups be allowed to outsource their compliance work to specialized providers rather than employ large numbers of compliance officers on their own. According to him, his organization will not waver in its commitment to protecting consumers and preventing illicit activity.
Lawsky made it clear that any firm that engages in misconduct will face significant penalties. The latest views from him is in continuation of what the DFS is going to do i.e. design a small group of specialized examiners to deal with start-ups and their license applications for greater parity.
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