The New York Department of Financial Services (DFS) has issued subpoenas to a number of bitcoin companies requesting information about the way in which they operate and the consumer safeguards they have in place.
A memo issued by the DFS, written by department head Benjamin Lawsky, suggests it wants to work with bitcoin companies to ensure the virtual currency industry can continue to exist as a âlegitimate business enterpriseâ.
âIt is in the common interest of both the public and the virtual currency industry to bring virtual currencies out of the darkness and into the light of day through enhanced transparency. It is vital to put in place appropriate safeguards for consumers and law abiding citizens,â the memo states.
The Wall Street Journal claims that around two dozen bitcoin companies have been issued with subpoenas, including BitInstant, Coinsetter and Coinbase.
Coinsetter wouldnât confirm whether or not this is true, but the companyâs founder Jaron Lukasiewicz said he believes the move has created the opportunity for bitcoin companies to work with regulators to create an environment in which virtual currency can thrive.
âThe companies you most often hear about in the bitcoin space take regulation very seriously and are working hard to do things the right way. I view this new dialogue as an opportunity to do that,â he explained.
Patrick Murck, General Counsel at the Bitcoin Foundation, feels less positive about the subpoenas: âThe requests are onerous and set a poor tone for New York as a home for innovation. The foundation will support its members and the bitcoin community as needed. This includes engagement with regulators and, where appropriate, legal defense.â
Marco Santori, Chairman of the Bitcoin Foundationâs Regulatory Affairs Committee, believes that the DFSâ approach was influenced by the industryâs reaction to the California Department of Financial Institutionâs (DFI) cease and desist letter to the foundation.
âThe DFS coupled their subpoenas with a public notice stating explicitly the purpose of their requests: to involve the industry in developing âappropriate regulatory guidelinesâ for the digital currency industry,â he explained.
In July, the foundation issued a formal response to the DFIâs cease and desist letter, clarifying why it is not under the jurisdiction of the DFI. It also detailed why, under Californian law, bitcoin isnât classed as a payment instrument. The foundation is still awaiting a response from the DFI.
UPDATE:
According to Forbes, the full list of companies issued with subpoenas is as follows.
Image credit: Flickr / hom26
