Bitcoin Milestone: New York Regulator Issues Call for Proposals from Virtual Currency Exchanges

Bitcoin Milestone: New York Regulator Issues Call for Proposals from Virtual Currency ExchangesBenjamin M. Lawsky, New York’s top financial services regulator, Tuesday let it be known officially that bitcoin exchanges can file their proposals with the state of New York in anticipation of finalized regulations by the end of the second quarter of 2014.
Lawsky, already seen as an ally by bitcoiners, said in a written order that “such proposals and applications represent the formal commencement of a regulatory process” for all virtual currencies.
His order also states that those proposals may be modified “to help ensure that they include robust consumer, cyber security, and anti-money laundering protections.”
Lawsky also confirmed that his New York State Department of Financial Services (NYDFS) is working on a “specially tailored BitLicense.” What’s yet to be determined is how much of a financial and regulatory burden those BitLicenses will be on bitcoin-related businesses.
Lawsky also cautioned consumers of the risks behind virtual currencies, citing the recent collapse of Tokyo-based Mt. Gox, which was the largest bitcoin exchange a year ago.  Bitcoins worth hundreds of millions of dollars are likely lost as a result of the Mt. Gox meltdown.
Lawsky: “Consumers should understand and receive appropriate disclosures about the potential risks associated with using virtual currencies or any other financial product, but the fact is that virtual currencies are unlikely to disappear entirely.”
Lawsky has held hearings in New York on cryptocurrencies and even presided over a question-and-answer session for the bitcoin community on Reddit.
Here is Lawsky’s full statement.

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