Ben Lawsky from New York’s Department of Financial Services made headlines yesterday after outlining his state’s plan for regulating Bitcoin, but his other comments about the cryptocurrency that may be more interesting. Speaking at Future Tense in Washington, DC, Lawksy weighed in on the recent price drops caused by the “transaction malleability” glitch.
“I think it’s an open question still how much of the problem is Bitcoin, how much of the problem is the programming at the exchange,” Lawsky said. “It’s one of the reasons frankly we’d love to bring these exchanges onshore so we could get better insight into what exactly they’re doing. And I think the sooner we provide a clear regulatory framework, hopefully the sooner we’ll attract the businesses who want to do it right to the U.S., to New York and keep it all from locating offshore.”
As reported on Politico, Lawsky also offered additional insights into New York’s forming Bitcoin regulations in an interview following his speech.
… Lawsky said the easiest and most obvious requirements he could implement would be consumer protections and disclosures. Lawsky has suggested informing customers that many digital currency transactions are irreversible and don’t offer a “money back guarantee.” Like mutual funds, firms could disclose price volatility and the potential for losses.
Lawsky, a former federal prosecutor who has made a career of going after corporate banking and insurance fraud, also spoke at length about his department’s efforts at “open source” regulation for Bitcoin and related virtual currencies. His office, he notes, is primarily “observing” Bitcoin developments, as their jurisdiction is limited to transactions directly involving businesses and customers in New York.