Linda Lacewell: US NYDFS is planning to change the contentious BitLicense

By Selena 12/13/19 3:29 AM

Linda Lacewell, superintendent of the New York Department of Financial Services (NYDFS), is working out BitLicense guidelines to propose amendments to the listing process of new cryptocurrencies. Currently, NYDFS almost approves all cryptocurrencies provided in the state on a case-by-case basis with individual exchanges.

NYDFS lays out new BitLicense guidance

The set of instructions includes two updates. Firstly, any cryptocurrency approved by NYDFS listed in New York can be listed on any exchange operating in the state. However, those exchanges must notify NYDFS. The second is that the regulator will issue a model framework for the coin listings that exchanges should model their versions around.

Linda A. Lacewell, superintendent of the New York Department of Financial Services (NYDFS)

Lacewell stated:

“It’s more than time to take another look at the virtual currency regulation given the passage of time, changes in the industry, maturation, sophistication, and new business models. What tweaks and changes can we make should we make because, while we must regulate, we only want to have enough regulation to get the job done and not a drop more.”

Currently, the public can freely comment on this new proposal until January 27, 2020. This is the first step in the licensing authority’s assessment.

“The idea is that you already have a license, you already have passed muster and have the controls in place, you are subject to examination by us. And we’ve approved a lot of coins since the early days, so can we cut through the red tape, and can we get to a place where responsible licensed companies can self-certify under appropriate guidance that we’re putting forward?” Lacewell added.

The five-year-old framework, known initially as BitLicense, has long been controversial. Especially when the Kraken and ShapeShift exchanges fully withdrawn from New York after it was adopted under NYDFS Director Ben Lawsky. Now, 24 cryptocurrency exchanges and other cryptocurrency companies have been licensed, including large companies like Coinbase and Circle.

However, Lacewell has stated that it is reviewing the current legal framework. The cryptocurrency industry has changed since the license was fully implemented for the first time in 2015, and it’s an excellent time to assess what this evolution means for licenses.

“How has the industry grown? Has it matured in any way? And I don’t want to get too specific, but, you know, what’s a good time for a second look.”

The fourth announcement is the latest in a series of moves that NYDFS has made this year to bolster its cryptocurrencies. The regulator said it was creating a department to monitor cryptocurrencies in July, named Research and Innovation Division.