New York’s Bitcoin Cop Benjamin Lawsky Steps Down to Start Firm

Benjamin Lawsky best known for his bitcoin regulations officially announced the end of his career as superintendent of New York Department of Financial Services.

Benjamin Lawsky, superintendent of New York's Department of Financial Services. Photo: Bipartisan Policy/Flickr

Benjamin Lawsky, superintendent of New York's Department of Financial Services. Photo: Bipartisan Policy/Flickr

The New York State Department of Financial Services (NYDFS) loses one of the brightest employees. In the end of June Benjamin M. Lawsky leaves to launch his own business.

Mr. Lawsky has been serving as a superintendent of financial services for four years. His career was marked by the development of the BitLicense – official regulatory base for digital currencies transactions in New York State. It is actually the first code for digital currencies of such a kind.

BitLicense aroused many contradictory opinions. It’s difficult to deny that set of regulations is needed to control the sphere. But it definitely makes a difference that bitcoin society wasn’t satisfied with the rules themselves. BitLicense was seen to be too rigid. Mr. Lawsky seemed to overdo in his intention to restrict businesses which would surely be undesirable for entrepreneurs. He at once turned from good to bad character for bitcoin enthusiasts.

There was a session recently in Manhattan organized by bitcoin CEOs and leaders specially to discuss the BitLicense and its consequences for bitcoin industry. Fred Wilson, founder of Union Square Ventures, gave an opinion that these regulations throw New York back and it loses to Silicon Valley and North Carolina.

Some companies even had to take measures to avoid strict rules of Lawsky. That concerned Xapo, digital wallet provider, in particular. Recently it relocated its headquarters to Zurich. The company denies that this move is connected with BitLicense but the tendency of considering New York to be inconvenient place for bitcoin business is frightening. Let us remind that not long ago Xapo teamed up with Taringa, Latin American social network, and added bitcoin reward system to the website.

The role of Lawsky in NYDFS can’t be underestimated. He charged several banks with manipulating currencies and interest rates. The total sum of penalties made up $6 billion. It’s interesting that he was ready to leave no sooner than banks pleaded guilty. And now DFS will get part of the fine imposed to UK-based Barclays ($485 million of the total of $2.4 billion).

Dennis Kelleher gave high praise to Mr. Lawsky: “Unlike too many other prosecutors, Ben Lawsky wasn’t impressed or intimidated by the rich, powerful and well-connected banks and bankers on Wall Street. He enforced law without fear or favor.”

Benjamin Lawsky thanked NYDFS for four years of hard and effective work. “I am deeply proud of the work our team has done building this new agency and helping strengthen oversight of the financial markets,” according to the official press release.

“We have assembled a great team at NYDFS and I have full confidence that the critical work of this agency will continue seamlessly moving forward. I also want to thank Governor Cuomo for the trust he showed in appointing me to this position and for providing us with the opportunity to serve the people of New York. On a personal level, I am deeply grateful to the Governor, who has been an incredible mentor and amazing friend to me over the past eight years.”

It’s known that Mr. Lawsky is planning to start up his own company. Bitcoin world of New York can sigh with relief and wish him new brilliant career.

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