Regulation Overview: NYDFS’ Benjamin Lawsky to Step Down, Ukraine Bans Bitcoin and Others

Russia reduced fines for bitcoin promotion amid the Ukrainian government banned the use of cryptocurrency; the future of BitLicense remains unclear as its creator Benjamin Lawsky resigns.

Benjamin Lawsky, the man who has been at the center of the bitcoin regulation firestorm, is reported to be weeks from relinquishing his post. Photo: Stony Brook University/Flickr

Benjamin Lawsky, the man who has been at the center of the bitcoin regulation firestorm, is reported to be weeks from relinquishing his post. Photo: Stony Brook University/Flickr

Benjamin Lawsky to step down from his post at the Department of Financial Services

Benjamin Lawsky, a superintendent at the New York State Department of Financial Services, is likely to leave his position in the beginning of 2015.

Lawsky, 44, started serving as a head of the Department of Financial Services in 2011 and became known in the bitcoin community for creating BitLicense, a bitcoin regulatory framework designed to increase confidence for investors and users of digital currency.

In July, the New York State Department of Financial Services issued its first draft of regulations, which was commented by the public during 45 days.

It is unknown how Lawsky resign will influence BitLicense and the implementation of its proposals in the future.

However, the news was accepted with a relief for many in the bitcoin community, as Lawsky’s proposals have often been called ‘anti-business.’

Earlier, he informed that BitLicense will come into effect in January 2015.

Bitcoin Banned by the National Bank of Ukraine

The National Bank of Ukraine (NBU) has stated that bitcoin cannot be used in Ukraine as a means of payment. Calling digital currency a “money substitute”, the NBU said bitcoin is known for being used for illegal activities, such as money laundering and financing terrorism.

 “In order to protect consumers’ rights and security of the money transfer National Bank recommends that you use the services of only those payment systems, settlement systems, which are included in the register of payment systems, settlement systems, participants in these systems and service providers payment infrastructure,” said the NBU representatives.

However, the statement is not an official ban of the ownership of crytocurrency, but rather a warning of negative sides associated with bitcoin.

The announcement comes amid the Ukrainian Hryvna fell to its lowest level of 15/USD.

Russia Cut Fines for Individuals, Legal and Official Entities

The Ministry of Finance in Russia has updated a bill that will reduce fines for creating, promoting and issuing the virtual currency.

Those who use bitcoins directly could be fined 50,000 rubles (nearly USD 1,050), while those who spread information on the digital currency could be fined 5,000-30,000 (USD 100-630) rubles.

The fines for legal and official entities will also be lowered. The maximum fine for legal entities promoting bitcoin will total 500,000 rubles (USD 12,500), a twice decrease from 1 million rubles.

The penalty for those who spread information on the virtual currency could face a fine of 300,000 rubles (about USD 6,580).

It is unknown what led to the fines reduction. According to the bitcoin blogger Yuri Filipov, the move resulted from the overall bitcoin price drop.

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