On January 10, 2014, the New York Department of Financial Services (DFS) announced that it will hold public hearings on January 28 and 29, 2014 regarding the regulation of virtual currencies. This announcement comes approximately two months after DFS Superintendent Benjamin Lawsky (“Lawsky”) announced his intentions to hold hearings on the possibility and feasibility of issuing a “BitLicense” specific to virtual currency transactions and activities.
In an interview with CNBC, Lawsky explained that the hearings were intended to be a “360 degree view of everything Bitcoin.” The DFS will elicit testimony from academics, “technical people,” investors, and law enforcement (among others), and will “dig deep” into the various implications of virtual currency-based business in order to map out the “rules of the [crypto-currency] road.” Although Lawsky initially expressed the concern that Bitcoin created a virtual “Wild West” for criminals, he denied that the hearings would focus on the virtual currencies’ “ability to make white collar crime easier.” Instead, he stated that the DFS was more interested in understanding the Bitcoin technology and its place in the market.
The hearings will be held at 90 Church Street in New York City, and are open to the press and the public. It will be interesting to see who testifies and the scope of questioning. It is likely the hearings will touch on many issues, including the scope of licensing, anti-money laundering guidelines, examination requirements, and consumer protection guidelines.