NY Financial Watchdog Makes New Division for Crypto Licensing

The division will be responsible for issueing BitLicense.

The New York Department of Financial Services (NYDFS) has created a division for the supervision and licensing cryptocurrencies.

Announced by Linda Lacewell, the newly appointed superintendent of NYDFS, the Research and Innovation Division at the Department of Financial Services, will take over all crypto-related tasks of the department’s in-house teams.

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“This division will oversee the virtual currency licensing process and will encourage development in the area,” the NYDFS stated.

Will it allow more firms to enter New York?

The NYDFS entered into crypto licensing in 2015 when it was made mandatory for cryptocurrency companies to obtain the controversial BitLicense for offering services in the state.

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The new division will now be responsible for handing out the BitLicense to crypto companies. Though the agency issued over 20 BitLicenses to date, it is still one of the more controversial licenses in the country and opposed by several key figures of the crypto industry.

“The financial services regulatory landscape needs to evolve and adapt as innovation in banking, insurance, and regulatory technology continues to grow,” Lacewell said in the official statement. “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.”

The superintendent also named four executives to lead the newly formed division.

Matthew Homer, an ex-executive at fintech startup Plaid, was appointed to head the division as executive deputy superintendent. Olivia Bumgardner, the current director of research at NYDFS, joined the division as deputy superintendent and will share the position with Matthew Siegel, an attorney in the Antitrust Division of the US Department of Justice. Andrew Lucas, director for the Office of Financial Innovation, will serve as counsel.

Meanwhile, the New York State Assembly legislators recently appointed six members in its crypto task force who will study the industry and make regulatory recommendations to lawmakers.

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