The new private office of the formally most active bitcoin regulator in America, Benjamin Lawsky, is now working for Axoni – a firm creating blockchain solutions for the big banks. The Lawsky Group was the press contact for Axoni when it announced the completion of its distributed ledger test with Bank of America Merrill Lynch, Citi, Credit Suisse and J.P. Morgan last week.
The former superintendent of the New York Department of Financial Services (NYDFS) faced criticism when he departed NYDFS last June. Some had alleged that Lawsky built for himself a “revolving door” in first creating the BitLicense regulations, which govern how virtual currency businesses operate in New York State, and then leaving to form his own private legal practice. Some suspected that he will advise businesses on how to get licensed according to the rules he created. Lawsky responded that he is barred from advising on such matters and will refrain from doing so.
Lawsky, who took a tough line with banks during his tenure at NYDFS – earning himself the nickname of “Sheriff of Wall Street” – has been criticized by the digital currency industry for what they believe to be excessively burdensome regulations. Taking a different route than most states considering regulation, the BitLicense rules add additional requirements specific to cryptocurrency, over and above the standard money transmission rules that have been adopted. Industry players expressed concern that the rules will stifle progress and innovation.
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Some have further accused Lawsky of deliberately engaging in a conflict of interest. They allege that Lawsky knowingly created tough rules in order to advise on how to navigate them later on.
“We’ll be doing a broad range of financial consultancy … and some financial technology public relations,” Lawsky Group spokesman Matthew Anderson was quoted by Reuters as saying on Wednesday. Anderson was also the spokesman of the NYDFS under Lawsky.