New York State Department of Financial Services (NYDFS) establishes research and innovation department to oversee cryptocurrency business

According to Coindesk's July 24 report, New York State's financial regulator, the New York State Department of Financial Services (NYDFS), is shifting its internal team responsible for overseeing the cryptocurrency-monitoring cryptocurrency business to a new division.

1280px-New_york_times_square-terabass (Source: WikiMedia )

In a statement on Tuesday, the new director, Linda Lacewell, announced that the research and innovation department of the Financial Services Department will track emerging financial technologies and “regulate the virtual currency and issue relevant licenses”.

The agency confirmed in a subsequent request for comment that the department's functions would include approval of the license under the state's BitLicense. BitLicense is a regulatory system that governs the purchase, sale or distribution of cryptocurrencies in the state.

The New York Financial Times stated:

The department will oversee the process of issuing virtual currency and will encourage development in this area.

Previously, Lacewell's previous director, Maria T. Vullo, opposed the conduct of regulatory experiments on non-bank financial companies when he led the agency. The establishment of the research and innovation department marked the temporary removal of the high pressures of the regulators.

Lacewell said:

With the continuous development of banking, insurance and regulatory technology innovation, the regulatory structure of financial services needs to evolve and adapt.

The New York Financial Services Department began to regulate companies in the cryptocurrency sector in 2015, and the BitLicense program also came into effect that year. Industry entrepreneurs such as Erik Voorhees, CEO of ShapeShift, attacked the then regulators. He has said:

We are only two kilometers away from the Statue of Liberty, and it is ridiculous to sell CryptoKitties without BitLicense.

According to reports, the agency issued only eight BitLicenses in the first three years after the implementation of the regulatory plan, and has now issued more than 20 licenses to cryptocurrency companies.

Lacewell also recently approved two subsidiaries of the cryptocurrency exchange, Seed CX, to operate under the state's BitLicense framework.

Newly appointed executives

The announcement of the announcement also announced the names of the four senior executives in the new department, all of whom have a background in government work.

The head of the department is Matthew Homer, executive vice president, who recently worked at financial technology startup Plaid. Olivia Bumgardner, the current research director of the New York Financial Services Department, will also join the department as the deputy director. Olivia led a number of initiatives involving digital assets and cybersecurity during his tenure as chairman of the New York State Financial Regulatory Authority. Matthew Siegel, an attorney in the US Department of Justice's antitrust division, will serve as the deputy head of the division, and Andrew Lucas, director of the Financial Innovation Office, will serve as legal counsel.

In an interview, Lacewell said:

The establishment of the new department and the appointment of executives have positioned the Research and Innovation Department (DFS) as the future regulator, enabling the department to better protect consumers, develop best practices, analyze market data, and further strengthen New York. As a global financial innovation center.