Internet & Social Media Law Blog
On January 28th and 29th, the New York Department of Financial Services (DFS) will hold hearings to discuss the regulation of virtual currencies, including the potential issuance of a “BitLicense” specific to virtual currencies. The DFS previously expressed concern about virtual currencies remaining a “virtual Wild West for narcotraffickers and other criminals….” Despite this concern,
the DFS, like FinCEN, has indicated a willingness to work with the virtual currency industry and other stakeholders to establish “appropriate regulatory guardrails to protect consumers and our national security.” The DFS “is concerned that – at a minimum – virtual currency exchangers may be engaged in money transmission as defined in New York law, which is an activity that is licensed and regulated by DFS.” Thus, even though the DFS has stated that it has not made a determination at this point about the necessary regulatory guidelines for virtual currencies, one might anticipate that, at a minimum,
these guidelines will include additional oversight and licensure “to bring virtual currencies out of the darkness and into the light of day.”
The upcoming hearings will be held in New York City and will include some high-profile players in virtual currency, such as Cameron and Tyler Winklevoss, Principals of Winklevoss Capital Management, Barry Silbert, Founder & CEO of SecondMarket and Founder of the Bitcoin Investment Trust, Fred Ehrsam,
Co-Founder of Coinbase, and Cyrus R. Vance, Jr., District Attorney of New York County.