NY financial regulator Ben Lawsky talks Bitcoin on Reddit

Home » NY financial regulator Ben Lawsky talks Bitcoin on Reddit
Lawsky's Reddit AMA "proof" photo, from his Twitter feed.

Lawsky’s Reddit AMA “proof” photo, from his Twitter feed.

Earlier today, New York Department of Financial Services (NYDFS) superintendent Ben Lawsky participated in a Bitcoin-themed Ask Me Anything (AMA) on Reddit, offering a window into the state’s plans for future regulation of the cryptocurrency. Lawsky made headlines last week after sketching out a regulatory framework that would include a “BitLicense” for those doing business in virtual currency in New York.

Responding to a question about the recent trend of banks closing the accounts of Bitcoin-related businesses, Lawsky responded:

I can’t tell you exactly why particular banks are taking certain actions but they may have some concerns related to Bitcoin being new, its price volatility, as well as the recent criminal cases. I think new, careful regulations, especially related to preventing money laundering, will make banks more comfortable with Bitcoin-related activity over time.”

Asked about his recent statement that the choice for regulators is either to permit money laundering or permit innovation, and that “we’re always going to choose squelching the money laundering first,” Lawsky elaborated:

I was giving a hypothetical at the hearing that used a very stark choice in order to underscore how important it is for all of us that we get the balance right and ensure that we have appropriate bsa-aml protections in place while at the same time not stifling innovation. In context, I was also trying to emphasize that money laundering is not to be taken lightly — in many ways it is the lifeblood of terrorism around the world. My hope is that if we can get appropriate guardrails in place to prevent money laundering, we can take a deep breath and really focus on trying to ensure that virtual currency firms flourish and continue to develop and innovate. I’m very excited about what the future could hold for this very powerful technology.”

One of Lawsky’s most telling quotes came after being asked about the seeming futility of efforts by the government to stop Bitcoin’s adoption in Russia and China.

Hard to put the genie back in the bottle. I can’t predict the future but Bitcoin is certainly a new powerful technology that holds a lot of promise for the future if we can mitigate some of the potential negatives like money laundering.”

Overall, Lawsky’s tone was largely positive, which is a welcome change from the more skeptical statements on virtual currency other regulators have recently given. It’s well worth reading the full AMA on Reddit for a greater perspective on the Bitcoin-related priorities of New York’s regulatory agencies. Lawsky is also active on Twitter.

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