Former superintendent of the New York Department of Financial Services (NYDFS), Benjamin Lawsky, cannot help you get a BitLicense in his new private practice.
Lawsky spearheaded the creation of specialized regulations for virtual currencies in the state, which would require certain businesses dealing in virtual currency to get a “BitLicense”. The rules came into effect right before Lawsky departed from NYDFS for the private sector last month.
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 are excessively burdensome regulations. Taking a different route than most states considering regulation thus far, the BitLicense rules add additional requirements specific to virtual currency, over and above the standard money transmission rules that have been adopted. Industry players expressed concern that the rules will stifle progress and innovation.
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.
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At the American Banker Blockchain 2015 conference in New York yesterday, Marc Hochstein, editor-in-chief at American Banker, posed the question to Lawsky:
“To clear the air, what would you say to someone who would think that maybe you built yourself a revolving door?”
Lawsky responded that he is in fact barred from working on matters he engaged in while at NYDFS. “If anyone said, ‘I want to hire you to help get a BitLicense from DFS,’ no can do,” said Lawsky.
His new practice, The Lawsky Group, has been registered in Delaware but will operate out of Manhattan.