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New York regulator starts accepting bitcoin exchange applications

12 March 2014  |  8712 views  |  0 New York Skyline 1

New York state's financial services regulator has begun accepting applications from firms wanting to set up virtual currency exchanges.

New York State Department of Financial Services (NYDFS) superintendent Benjamin Lawsky is planning to bring in regulation designed to boost consumer protections and guard against money laundering related to bitcoin and other crypto-currencies.

The public order means that firms can immediately begin submitting proposals and applications which will represent the "formal commencement of a regulatory process".

Approved applications will be required to stick to the framework currently being hammered out by the NYDFS and set to be put in place before the end of the second quarter.

Says Lawsky: "The recent problems at Mt. Gox and other firms further demonstrate the urgent need for stronger oversight of virtual currency exchanges, including robust standards for consumer protection, cyber security, and anti-money laundering compliance.

"We will continue to proceed swiftly and thoughtfully to provide rules of the road for reputable virtual currency firms seeking to conduct business on-shore in a responsible manner."

Meanwhile, the Mt. Gox saga referenced by Lawsky rumbles on, with the exchange winning temporary bankruptcy protection in the US. A Dallas judge has agreed to protect the firm's assets and temporarily halt two US lawsuits while bankruptcy proceedings go on in Japan.

One suit is a class action filed in Chicago in which plaintiff Gregory Greene says Mt. Gox intentionally and knowingly failed to provide its users with the level of security protection for which they paid. The other suit is a breach of contract case filed by CoinLab.

In cheerier bitcion news, a group of 10 businesses along two canal-side streets in The Hague will all begin accepting bitcoin at 17:57 on 20 March - the beginning of spring in the Netherlands.

According to CoinDesk, nine restaurants and one art gallery are taking part in the 'bitcoin boulevard' project, which has backing from The Hague tourist office.

Elsewhere in Europe, Londoners can now exchange cash for virtual currency at the country's first bitcoin ATM, situated at the Old Shoreditch Cafe and bar. The Lamassu machine scans a QR code on a consumer's mobile wallet to send the crypto-currency to their bitcoin account. There is a commission fee of eight per cent and transactions are limited to £1,000 per month for each customer.

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