The New York state’s Department of Financial Services (NYDFS) has reconstituted its crypto division and created a new division to be in charge of crypto as well as other emerging technologies.
The new Research and Innovation Division at the Department of Financial Services will now be in charge of licensing crypto-related businesses through the BitLicense regulatory framework. “This division will oversee the virtual currency licensing process and will encourage development in the area,” the NYDFS wrote in an online statement on Tuesday. Therefore as was before, businesses interested in selling, buying or trading cryptocurrencies with residents of New York will need to get approval by applying to secure the much elusive BitLicense.
Since its launch in 2015, the BitLicense was initially granted to only 8 business in the first three years something that most crypto entrepreneurs criticized harshly. ShapeShift CEO Erik Voorhees is one such individual who once said of the NYDFS’s BitLicense that,
“Here we are two miles from the Statue of Liberty and you cannot sell CryptoKitties in the state without that license. That’s the absurdity of what’s happened here.”
The tight regulatory framework could be attributed to the outgoing lead Superintendent Maria T. Vullo who discouraged experimentation of the legal framework to incorporate the new financial landscape being built by the blockchain startups and Fintechs.
The newly constituted division also comes with a new team as well headed by Matthew Homer whose previous designation was leading the policy and research efforts of Quovo, a FinTech organization based in New York. Just below him are two deputy superintendents Matthew Siegel and Olivia Bumgardner. Bumgardner was the director of research at the state’s financial watchdog, specifically leading initiatives related to cybersecurity, financial inclusion and digital assets such as cryptocurrencies. Siegel was previously working as an attorney in the Antitrust Division of the U.S. Department of Justice (DoJ). Andrew Lucas, a former director of the Office of Financial Innovation will now be the new Division’s counsel.
Speaking of these appointments in the statement, Linda A. Lacewell – who is the newly appointed superintendent to take over from Vullo – said that,
“This new division and these appointments position [the department] as the regulator of the future, allowing [it] to better protect consumers, develop best practices, and analyze market data to strengthen New York’s standing as the center of financial innovation.” Lacewell added that “The financial services regulatory landscape needs to evolve and adapt as innovation in banking, insurance, and regulatory technology continues to grow.”