New York Department of Financial Services to Hold Bitcoin Public Hearings

In a move to further explore the state of bitcoin and to weight the pros and cons of the digital currency, the New York Department of Financial Services is planning to hold public hearings on January 28 and 29.

Superintendent Benjamin M. Lawsky issued a notice giving a brief overview of the goals of the hearing on January 10. It’s a fact-finding initiative that is meant to help shape any regulatory actions if and when they take place. Most importantly, the hearing will determine the viability of a so-called “BitLicense,” which will outline “anti-money laundering and consumer protection requirements.”

Some questions regarding BitLicenses include:

• What specific types of virtual currency transactions and activities should require a BitLicense?

• Should entities that are issued a BitLicense be required to follow specifically tailored anti-money laundering guidelines?

• Should entities that are issued a BitLicense be required to follow specifically tailored consumer protection guidelines?

• Should entities that are issued a BitLicense be required to follow specifically tailored regulatory examination requirements?

The hearing follows a NYDFS inquiry in August that saw 22 bitcoin companies receiving subpoenas for information regarding investments, anti-money laundering safeguards, and consumer protection rules. According to BitPay’s CEO, Tony Gallippi, the hearings are mostly an inquiry into consumer-facing bitcoin services.

All eyes will be on New York as the hearings may determine how other states act in the future regarding regulation of bitcoin and digital currencies in general.