Benjamin Lawsky, the former superintendent of the New York Department of Financial Services known for introducing the controversial licensing regime for Bitcoin and cryptocurrency industry has been a target of the Bitcoin community. In a recent interview, he was asked about the intentions behind introducing BitLicense in New York during his tenure.
Introduced by Benjamin Lawsky while he held the office of NYDFS, BitLicense puts in place a lot of regulations for the digital currency start-ups operating in New York State. These regulations are found to be on par or tougher than the existing federal regulations for banking sector. The final version of BitLicense was enforced by Lawsky just before he left NYFDS.
Soon after leaving NYFDS, Benjamin Lawsky started his own consulting firm. Registered as Lawsky Group in Delaware, the company offers consultation services to businesses, including cryptocurrency based business. Enforcement of BitLicense in the State of New York has made it one of the unfavourable destination for many bitcoin based businesses. Few businesses have already withdrawn their operations in New York State instead of complying with the rigorous compliance requirements which goes against the principle behind bitcoin. According to various digital currency firms, BitLicense compliance requirements violate the privacy of their customers and also, it is hard for small start-ups in upcoming digital currency sector to meet those requirements as it requires a lot of capital.
In his first public appearance since exiting NYDFS, Benjamin Lawsky attended a digital currency conference held in Manhattan. In an interview with Marc Hochstein, the editor-in-chief of American Banker Benjamin Lawsky was asked about the possible conflict of interest while issuing BitLicense.
In response to the question, Lawsky said that as per the rules, he is not allowed to work before NYDFS for a period of two years after leaving the office and that he can never work on anything he was involved in while serving the department. He further went on to say that he can’t help any cryptocurrency companies get BitLicense from DFS.
The interview might have helped him clear the air about his intentions behind introducing BitLicense among the bitcoin community. BitLicense has the potential to hamper innovation in bitcoin and digital currency space. Companies like Eobot and ShapeShift have already shifted their businesses away from New York State to more favourable locations.