NY Regulator Argues BitLicense Regulation Boosted Businesses

The New York State Department of Financial Services is taking steps to defend its much-contested track record as an early regulator of cryptocurrency.

In remarks at this year's Conference of State Bank Supervisors spring meeting Tuesday, NYDFS superintendent Maria Vullo discussed the agency's efforts to police the cryptocurrency space, touting the state's technology-specific licensing regime, the BitLicense, as an example of how her agency has contributed to the maturation of the industry.

Because the agency's role is to protect consumers, cryptocurrencies needed to be regulated, and these regulations, she argued, have benefited the space.

"The regulatory structure that we created for virtual currency has helped our licensed companies attract greater interest from customers, investors, and potential financial services partners seeking to pursue further innovation, while protecting market integrity by stringent standards applicable to all law-abiding business enterprises."

Vullo said her agency held public hearings in early 2014, before she took over the top job, as "The problems at Mt. Gox - then handling 70 percent of Bitcoin exchanges - continued to spiral out of control." The regulator drafted rules governing virtual currency businesses and finalized the BitLicense in 2015.

"DFS and the states have helped set the standards through our application and examination processes to ensure that customer protection is taken seriously, and cybersecurity and standards are respected."

Only a handful of companies have obtained the license, and New York State assemblyman Ron Kim submitted a bill in February to replace the framework.

Kim told CoinDesk last month that "One person, the superintendent from one state government agency, has way too much power over the current regulations, without any oversight."

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