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- Appointment of Enforcement Attorney as Head of Research and Innovation – Boon or Bane?
- Stricter guidelines and rules in place for companies dealing in virtual currencies
- Future seems bright with more companies working with the Department of Financial Service
Virtual currency regulation has been in place for more than six years now in New York, USA. BitLicense has enabled more than 30 companies to register their base in NY after the government had announced strict regulations in 2015. The Department of Finance will now appoint Debra Brookes as head of the Research and Innovation Division. Eyebrows are raised as she has held roles in Enforcement Division and Consumer Protection and Financial Enforcement Division.
Are regulations going to be in favor of Fintech Companies?
Given the latest division head’s profile, virtual currency companies will look where they tread first. She even held the position of Deputy Virtual Currency Chief in the same division. At this point, she has to look at the bigger picture. It was in mid-2019 that a new division was announced to overlook innovations in the financial services marketplace.
Cryptocurrency is undoubtedly something to overlook, given its intricate process of mining and supply. The State government feels that consumer rights are at stake if the virtual currency space is not adequately regulated. The companies under this division are subject to consumer protection and capital requirements. Strict policies such as anti-money laundering compliance programs should also be in place. The enforcement attorney’s appointment may ring in further restrictions. Some are beneficial and harmful for growth.
Money transmitter license to SoFi Digital Assets, LLC.
The New York State DFS approved the application of SoFi Digital Assets, LLC, a wholly-owned subsidiary of Social Finance, Inc., for a license to transfer money virtually. Offering license picks up pace in late 2019 and since has risen owing to the pandemic. The continuously evolving financial space will now allow New York customers to buy and sell cryptocurrencies. The license giving spree of the government is contrary to some belief that it is draconian in nature.
A new form of Bitcoin regulation crept in with BitLicense, which helps store, transmit, and operate a virtual currency. Anti-money laundering rules need to be followed for the swift flow of currency and business.
No questions were raised for the adoption and approval of cryptocurrencies in NY.
The DFS still believes that it has not yet provided the best environment for innovation of virtual currencies via regulations. Companies can now self-certify themselves on the Department’s portal and do not require a centralized approval. Compliant innovation in the industry will lead to the organic growth of all companies. The government does not aim to stifle innovation with hefty fines and policies but plans to create a stimulus for the same with legal statutes.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
