New York's Battle Over Bitcoin: Will Regulators or Entrepreneurs Shape Bitcoin's Fate in the Empire State?


New York to Regulate Bitcoin: Is the Cryptocurrency Biz Like "the Wild West?"

Original release date was January 30, 2014. Original text is below:

Yesterday, the New York State Department of Financial Services (DFS) concluded a two-day fact-finding hearing on how to regulate Bitcoin and other virtual cryptocurrencies. The purpose of the hearing was to consider whether or not Empire State regulators should have a direct role in overseeing the use of virtual cryptocurrencies, or if existing federal regulations suffice.

In his opening remarks, New York State Superintendent of Financial Services Benjamin M. Lawsky made it clear that the question wasn't so much if New York should regulate cryptocurrencies, but how. "Right now, the regulation of the virtual currency industry is still akin to the Wild West," said Lawsky. "That lack of regulation is simply not tenable for the long-term." Lawsky also expressed a desire not to "clip the wings" of a promising new technology, and acknowledged the potential of cryptocurrencies to revolutionize the money transmission industry.

The first panel consisted of some of the leading investors and venture capitalists in the world of Bitcoin, including Barry Silbert of SecondMarket and the Bitcoin Investment Trust, Jeremy Liew of Lightspeed Venture Partners, Fred Wilson of Union Square Ventures, and Cameron and Tyler Winklevoss of Winkelvoss Capital Management. All five participants urged the DFS to take a light touch to avoid quashing innovation or driving the industry abroad.

When one panelist suggested that small upstarts could outsource their regulatory compliance duties to other firms, Fred Wilson of Union Square Ventures told the panel, "That sounds like a terrible idea." He continued:

You're talking about introducing all of the costs into the system that we're trying to take out of the system. Let's just understand what we're trying to do with Bitcoin. We're trying to create a world where transactions can move globally for free. And making these companies hire some outsource compliance firm is a bad idea.

Members of the DFS voiced concern that Bitcoin could be used to facilitate narcotrafficking and other illegal activities, as it did in the case of Silk Road, an online drug bizarre that was shut down by the government in October. On Monday, the day before the hearings began, Charlie Shrem, the founder and CEO of BitInstant and a major figure in the Bitcoin community, was arrested on charges of using cryptocurrency to launder money. The Winkelvoss brothers, who participated in the hearing, were major investors in Shrem's firm.

Jeremy Liew of Lightspeed Venture Partners told the panel that these cases demonstrate that additional laws and regulations to protect against money laundering aren't necessary. "Law enforcement did a fantastic job using existing regulations," said Liew. "It appears to have been controlled." At a later session, Cyrus R. Vance, Jr., the district attorney of New York County, and Richard B. Zabel, the deputy U.S. attorney for the Southern District of New York, argued that these recent prosecutions pointed to the need for more oversight. "There were hundreds of people engaged in criminal conduct dealing with these entities and dealing in virtual currencies and they haven't all been arrested," said Zabel.
But what sorts of rules are needed to help combat money laundering that don't already exist on the federal level? The participants offered few specifics. Bitcoin investors expressed hope that any new regulations will be written broadly enough that they don't halt innovation or drive the industry abroad. "Regulators are going to have to come up with a way to treat Bitcoin that is balanced and thoughtful," said Barry Silbert, "but also recognize that this is a global phenomenon."

"Bitcoin challenges the duopolistic incumbents," said Tyler Winklevoss, "and I think that's very healthy and I think that's very American and it's what we should all be striving for."
About 3 minutes.

Related: Wall Street's New Cryptocurrency Headquarters: Inside the Bitcoin Center NYC

Original release date: January 28, 2014. 

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43 responses to “New York's Battle Over Bitcoin: Will Regulators or Entrepreneurs Shape Bitcoin's Fate in the Empire State?

    1. They destroyed something they did not have the right to destroy on their own decision.

      1. Yeah, fuck them. The Outdoor Code – “Leave No Trace”

        1. If they were on trial in asshole court, I would convict. “Criminal Mischief” is a bit much, though.

          1. Which of us, especially as kids, didn’t knock over dead trees or precarious rocks while goofing off in the woods? (I actually got my foot trapped under a big one for a while after doing that once, so I stopped.)

            We didn’t record it and post it somewhere everyone could see it, though.

    2. People. Fine, acting stupid is part of having fun and being human. STOP making records of it and posting it on yootooobz.

      Questions: Haven’t all natural rock formations been around for 150M years? Should you get fined every time you move a rock? Where does that line live? Pretty rocks?

      1. I believe the park was formed specifically because of those type of rock formations. They are what people come there to see. We are not talking about skipping stones here.

        1. That thing would have blown over in the next major storm anyway.

          1. That thing would have blown over in the next major storm anyway.

            True. That doesn’t give them the right to do it themselves, though.

            I think my biggest bitch with this story is the over the top pearl clutching and proclaimed outrage over a rock. They should be fined. Criminal mischief is WAY too much. But the claims by the flower children of national tragedy and destruction of a natural wonder annoy the living shit out of me.

            Like Epi said, we all have pushed shit over to watch it crash.

            1. I’m beginning to wonder if I am at risk of a life sentence in prison for some of the stuff I have done in the desert (I posted a video of me blowing up a propane tank with a 9mm here a few years ago).

              I’m not even sure a fine is appropriate, as I’m not familiar with that state park. What I do know is that these guys were only charged because of all of the negative publicity, which in my mind undermines the rule of law.

        2. I’m more interested in where the line is between formations parks are formed around and skipping stones.

          So you should only be fined for moving rocks that people come to see. Rolling over a rock along the trail that wasn’t on a pedestal is okay?

          And then there’s “the microbes”.

          According to my guidebook, we’d be taking a short hike through the Valley of the Goblins. In reality, there was no clear trail and people wandered about as they pleased. That made it a bit more interesting in some respects, but I was all, “What about that microscopic life on the desert floor that we’re constantly being told is disrupted by humans tromping over the delicate ground? A single footstep can kill 10,000 years of growth that’s barely visible to our eyes. How can they allow this?”

          1. There is quite a lot of logical space between damage that is incidental to an activity like hiking (where hiking is allowed) and deliberate destruction of a natural permanent formation. Part of this seems to me common sense. The park is not their personal property, deciding that a rock formation is dangerous and removing it is their call. If they had concerns, then take it up with a ranger. Especially with something the park was created to preserve.

            The severity of the charges may be questionable, but the fact that they did something they had no right to do should be beyond dispute.

    3. Don’t read the comments.

      Ughh they are truly terrible.

      1. I had to look but tapped out after “typical boorish American” and “it was the typical Mormon disregard for the earth”.

        The boogeymen (and massively collectivist boogeymen, no less) these pathetic fucks make up in their heads are usually so far removed from reality that one can only really determine that they actually live in their own world. It’s unbelievable.

        1. Shortly after that comment, there was an obligatory “The Oil Companies are coming after our National Parks!!!!!”.

  1. In other currency news, the chickens finally came home to roost for that statist hag Kirchner–another peso crisis Argentina.

  2. OT: hahahaha. Nice work Lou.…..n-evidence

    1. “‘The Florida Department of Law Enforcement is a top notch law enforcement agency. I continue to have complete confidence in them and their work. This situation simply underlines the extent of the problem our country faces with prescription drug abuse,’ Bondi said in an emailed statement.”

      Jaysus wept.

  3. Wild West fail. Also, I love redheads.

    1. Brockwell…what else does she do well? (TIWTANLW.)

  4. Will Regulators or Entrepeneurs Shape Bitcoin’s Fate in the Empire State?


    Uh, any other questions? No? Uh, ok, well… thank you for all coming.

  5. online drug bizarre

    Fucking proofreading- how does it work?

  6. We’re going to need you all to keep using cash to buy your drugs.

    1. Or Tide

  7. New York is so strange. It was the financial capital of the world, now it trying to stomp out any reason to business in the state.

    1. New York has been run by control freaks for a long time, and they are just getting worse. They have to have the illusion that someone is overseeing everything, even if actual control is ludicrous.

    2. Familiarity breeds contempt.

  8. “There were hundreds of people engaged in criminal conduct dealing with these entities and dealing in virtual currencies and they haven’t all been arrested,” said Zabel.


  9. “That lack of regulation is simply not tenable for the long-term.”

    Everything not mandatory is prohibited.

  10. I love that woman. She makes my tongue hard.

    1. She makes me grunt like a horde of horny cavemen.

  11. I love that woman. She makes my tongue hard.


    1. Because she is incapable of hardening tongues?

  12. “I was invited last September to observe a meeting convened by Jordan’s King Abdullah in his country’s capital, Amman. Several dozen leaders of the Christian congregations of the East attended the meeting; I listened as these Catholic cardinals, Orthodox patriarchs and Anglican and Coptic bishops described the plight of their people.

    “No one was discussing their theological differences, because it was their churches that had been burned, their relatives who had been kidnapped and killed, and nearly every one of them told stories of consoling an inconsolable mother or child as they grieved the death of their last living loved one.

    “I wept as I heard their stories, and I wondered why Christians around the world weren’t incensed by it all.

    “Ironically, that meeting in Jordan was not convened by Christians, but by Muslims who cared about the plight of their Christian neighbors.”…..hristians/

  13. You know who else liked to regulate things?

  14. Nothing left to cut

    Facing a $78 million budget shortfall, California’s ObamaCare exchange has spent $1.37 million to fund an outreach video featuring exercise guru Richard Simmons gyrating on the floor and hugging a contortionist who is kneeling with his buttocks in the air.

  15. At what point during a project is it acceptable to break down in tears?

  16. Wow man OK that really makes me angry dude. LIke seriously.

  17. lol, US POlitics. Best politics money can buy!

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