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Author Topic: [2017-06-20] Bitcoin Startups are Subject to “Periodic Exanimations” in New York  (Read 2494 times)
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June 21, 2017, 04:53:14 AM
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In its annual report, the New York Department of Financial Services (DFS), the state’s financial regulator, has revealed details of its oversight into the local bitcoin and digital currency industry.

The financial regulator published its 2016 annual report last week, detailing a broad summary of regulatory moves, accomplishments, banking numbers and insurance statistics in the state of New York.

Intriguingly, the DFS filed its regulatory and licensing reign over digital currency companies under “Major Accomplishments [of 2016]”. Underlining the emergence of virtual currency and blockchain technology as an opportunity and a challenge for regulators, the regulator pointed to their benefits, namely improved efficiency, record-keeping and clearing. Their risks, as seen by the DFS, is the technologies’ ability to bypass existing regulatory requirements. Or, that regulatory requirements are unable to keep up with the speed of transactions offered by blockchain technology.

“Easier facilitation of payments and anonymous movements of funds can be dangerous without the compliance and oversight designed to safeguard consumers, and to prevent money laundering and funding illegal activities,” the Department wrote.

The report also revealed, notably, that the regulator had begun examining digital currency companies in 2016.

An excerpt of the revelation read:

Quote
DFS has begun examinations of these virtual currency companies, which, like other regulated financial services entities are subject to periodic examinations by DFS.

The regulator mandated a regulatory license for digital currency startups in 2015. In a little over 30 months, it has issued licenses to a total of 3 companies in the industry. Circle gained the first ‘BitLicense’ in late 2015, as a then-bitcoin startup. Ripple was next in 2016, followed by Coinbase in January this year. In March, the DFS approved Coinbase to enable trading of Ethereum’s Ether token and Litecoin.

The DFS claims it has licensed five virtual currency companies so far, presumably referring to the banking charters granted to the Winkevoss brothers’ Gemini exchange and Paxos (itBit at the time).

The report can be found here, with the regulator seeing fit to highlight its regulation of virtual currency companies between ‘preventing terrorism financing” and “combating bank secrecy act and anti-money laundering violations” in its win column.

https://www.cryptocoinsnews.com/bitcoin-startups-subject-periodic-exanimations-new-york/

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