Benjamin Lawsky, superintendent of the New York Department of Financial Services, told Bloomberg on Tuesday that if his office’s regulations hurt Bitcoin as an anonymous money source, “so be it.”
Bitcoin is a growing “cryptocurrency,” an all-digital and semi-anonymous virtual way of purchasing goods and services.
Though some regulators have likened it to other virtual currencies that have been used to launder money or drugs, advocates argue that Bitcoin’s unique, decentralized nature — which keeps the technology from being entirely anonymous — prevents it from being advisable for illicit use.
Bitcoin includes a public “block chain” of every transaction made via the technology is available to all users, making it easy for regulators to track any suspicious transfers.
But regulators are still wary of the new technology and federal bureaucrats, congressional committees and state regulators have all begun inquiries into how Bitcoin really works to determine how to proceed with regulation.
Lawsky made some Bitcoin entrepreneurs nervous in August by sending out 22 subpoenas to companies using Bitcoin, which some experts saw as a positive sign.
Jerry Brito of the Mercatus Center previously told The Daily Caller News Foundation in the wake of Lawsky’s subpoena spree that bureaucrats’ interest in learning more about Bitcoin could be beneficial.
“The alternative is that the regulator regulates without any input,” Brito said.
But Lawsky let his ambivalence about letting the start-up technology prosper show during an interview.
“It feels as if the major advantage [Bitcoin is] providing is anonymity,” Lawsky said. “”We’ve learned over the years that if you see huge international transactions over the Internet, anonymous, it can often become a haven for money launderers.”
Though the state regulator’s comments about the currency’s future seemed harsh, Bloomberg reported that Lawsky believes transparency rules won’t harm Bitcoin’s rising star if the technology is used for “legitimate financial transactions.”
Lawsky’s tendency toward active regulation inspired some to coin him a title as New York’s “rogue regulator.”
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