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DFS Superintendent Lawsky Discusses Revised BitLicense Framework

On December 18, New York State Department of Financial Services (DFS) Superintendent Benjamin Lawsky delivered remarks on the revised BitLicense framework at the Bipartisan Policy Center in Washington, DC. If adopted, the proposed BitLicense framework would regulate and license companies performing virtual currency business activities. Superintendent Lawsky explained that the changes to the BitLicense framework were intended to provide additional flexibility to virtual currency firms while maintaining consumer protection. 

Noting several potential benefits of virtual currencies such as Bitcoin, Superintendent Lawsky clarified that the BitLicense is intended to apply only to virtual currency businesses that are operating as financial intermediaries. He further stated that the proposed framework was intended to subject those virtual currency firms to the same examinations, anti-money laundering, accounting or recordkeeping standards as other financial institutions. 

Addressing vocal comments concerned with the cost of compliance on start-up businesses, Superintendent Lawsky stated that a two-year transitional BitLicense will serve as an “on-ramp” for start-ups focusing on building their virtual currency enterprises. Other changes include broadening the range of financial assets that may be counted for capital requirements and reduced requirements with respect to recordkeeping and identification of third-party counterparties in virtual currency transactions.

Superintendent Lawsky stated that the new BitLicense framework will be published on the DFS website in the coming days. He also referenced and noted the concurrent actions of the Conference of State Bank Supervisors (CSBS), but clarified that the model regulatory framework released by CSBS was separate and apart from the proposed BitLicense. 

Click here to read Superintendent Lawsky’s remarks.

©2020 Katten Muchin Rosenman LLP

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About this Author

Claudia Callaway, Litigation Lawyer, Katten Muchin
Partner

Claudia Callaway is chair of Katten’s Consumer Finance Litigation practice and co-chair of the Class Action and Multidistrict Litigation practice. She focuses her practice on the defense of state and federal class actions regarding consumer protection and consumer finance laws and representation of clients before the Consumer Financial Protection Board (CFPB), the Federal Trade Commission (FTC) and state banking agencies.

Claudia represents consumer lenders, third-party debt collectors and other consumer  financial services clients in class action suits and...

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Christina J. Grigorian, Banking legal Specialist, Katten Muchin Law firm
Special Counsel

Christina J. Grigorian counsels clients in all matters related to banks, bank holding companies, and state and foreign-licensed consumer and commercial lenders. Ms. Grigorian provides advice to the firm’s financial institution clients concerning structural and operational issues, including legislative developments impacting such operations, and has worked with companies and individuals in the establishment of de novo entities, including national banks, federal savings banks and state-chartered institutions, as well as state-licensed lenders. She has also counseled clients with respect to...

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