NYC Department of Financial Services sends subpoenas to 22 Bitcoin-related companies

The New York Department of Financial Services (DFS), a top banking regulator, has recently issued subpoenas to 22 Bitcoin-related companies. Apparently, the action is part of an inquiry into the business practices of the virtual currency industry.

Some of the companies that received the document were Coinbase, BitInstant – that is still suspended and going through an update – and Coinsetter. According to the Wall Street Journal (WSJ), the department contacted these firms to find out more about antimoney laundering programs, consumer protection measures and investment strategies in the Bitcoin field, among other topics.

In an email sent to the WSJ, the chief executive of Coinsetter said that the request is “an opportunity for companies in our space to open up a much needed dialogue with regulators”. Jaron Lukasiewicz added that, with this decision, the DFS acknowledges the fact that most companies are working to legitimize Bitcoin and “want to build bridges that help regulators understand and support these financial innovations”.

On the other hand, Benjamin Lawsky, superintendent of the DFS, issued a memo in the beginning of this week where he expresses the concern that virtual currency businesses aren’t complying with the state’s money transmission laws.

In the document, he said that putting up regulation would be good for the digital coin industry because “serving as a money changer of choice for terrorists, drug smugglers, illegal weapons dealers, money launderers and human traffickers could expose the industry to extraordinarily serious criminal penalties”.

The memo adds that “if virtual currencies remain a virtual Wild West for narcotraffickers and other criminals, that would not only threaten our country’s national security, but also the very existence of the virtual currency industry as a legitimate business enterprise. Indeed, it is in the common interest of both the public and the virtual currency industry to bring virtual currencies out of the darkness and into the light of day through enhanced transparency. It is vital to put in place appropriate safeguards for consumers and law-abiding citizens”.

Via and

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