NYDFS Announces New Division To Oversee Crypto Businesses

The New York State Department of Financial Services (NYDFS) has announced the launch of a new in-house division which will specifically oversee cryptocurrency businesses.A statement released by the federal agency stated that the DFS would keep pace with the rapid changes in all sectors of the financial services industry. It further added that the DFS would also house the Department’s division responsible for licensing and supervising virtual currencies, and it will assess new efforts to use technology to address financial exclusion; identify and protect consumer data rights; and encourage innovations in the financial services marketplace to preserve New York’s competitiveness as a financial innovation hub.Financial Services Superintendent Linda A. Lacewell said, “The financial services regulatory landscape needs to evolve and adapt as innovation in banking, insurance and regulatory technology continues to grow. This new division and these appointments position DFS as the regulator of the future, allowing the Department to better protect consumers, develop best practices, and analyze market data to strengthen New York’s standing as the center of financial innovation.”In April this year, cryptocurrency exchange Bitstamp which was started to compete with Mt. Gox crypto exchange back in 2011, finally managed to obtain a BitLicense from NYDFS.At the time, the company had put out a statement saying, “Bitstamp has always embraced regulatory efforts which focus on transparency and accountability that can help expand the industry. Obtaining a BitLicense is a key element in ramping up our presence in the United States, especially when it comes to working with institutional investors.”While NYDFS is taking steps to boost the growth of cryptocurrency adoption, it has not always been permissive. In April, it had rejected the BitLicense application filed by cryptocurrency exchange Bittrex to operate in the state.Citing a few deficiencies, the Department had stated that it was turning down the application due to Bittrex’s failure to demonstrate that it would run its business honestly and fairly.Liked what you read? Join us on Telegram