The New York State Legislature and the New York Department of Financial Services (NYDFS) have both introduced new teams to help with the regulation and licensing of cryptocurrencies and crypto businesses in the state.
The New York Digital Currency Task Force
Six blockchain industry and cryptocurrency experts will join the New York State Digital Currency Task Force to investigate and propose new crypto regulations.
There will be a total of 13 members on the task force, the first six of whom were appointed by New York State Assembly legislators. The remaining seven will be appointed by the governor.
Assemblyman Clyde Vanel revealed in a video that the six individuals will advise the state on how to define and regulate cryptocurrencies. They will also be responsible for preparing reports regarding the cryptocurrency industry for December 15, 2020.
“We’re excited that we’re going to have some of the premier people in blockchain technology and in cryptocurrency to help guide New York State and the country — and maybe the world — on our finding the right level of regulations,” Vanel said, per video.
The appointed members include Joseph Lubin, ConsenSys founder; Sandra Ro, CEO of Global Blockchain Business Council; Yaya Fanusie, an adjunct fellow at the Foundation for Defense of Democracies; Yorke Rhodes, co-founder of Blockchain at Microsoft; Ryan Zagone, director of regulatory relations at Ripple; and Aaron Wright, a professor at the Cardozo School of Law.
New York became the first state to create a crypto-related task force in January 2019 A press release at the time revealed the government's interest in blockchain technology and its role in improving transparency and efficiency in both the public and private sectors.
The Research and Innovation Division at NYDFS
Meanwhile, New York’s financial watchdog NYDFS has also created a division to manage cryptocurrency licensing.
On July 23, 2019, Superintendent Linda Lacewell revealed the establishment of the NYDFS Research and Innovation Division that will supervise the licensing of virtual currencies as well as ensure the agency stays on top of all changes within the financial services industry.
Four individuals with backgrounds in government have been selected to lead the division, including former Federal Deposit Insurance Corporation (FDIC) policy staffer Matthew Homer, who will serve as executive deputy superintendent.
Matthew Siegel, who served as a trial attorney in the antitrust division of the U.S. Department of Justice, will serve as deputy superintendent along with Olivia Bumgardner, former director of research at NYDFS. Andrew Lucas, who was previously the department’s director for the office of financial innovation, will join the division as counsel.
“This new division and these appointments position NYDFS 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,” Lacewell said, per the press release.
In 2015, the NYDFS released its final set of BitLicense regulations that would require virtual currency firms to obtain a special license to operate in the state of New York. Since then, the state has granted over 20 licenses to cryptocurrency businesses despite its controversial relationship with the crypto industry. Just last week, Lacewell approved two subsidiaries of Seed CX, a Chicago-based cryptocurrency exchange, with virtual currency licenses.