BitPay and Vaurum announced the addition of a seasoned regulatory adviser.
Former Securities and Exchanges Commission Chair Arthur Levitt oversaw the U.S. agency for half a decade and is well-versed in U.S. financial regulations.
Levitt told The Wall Street Journal that he aims to “help them understand the imperative of a robust approach to regulation.” He indicated that he was lured by the excitement that carries the technology.
“Bitcoin is a fascinating new product in the rapidly changing world of financial service,” said Levitt. “I hope to help BitPay and Vaurum blend their new business models with core monetary methods and transparency practices in order to ensure their long term success.”
He noted that regulation is necessary to attract notice from the broader public. Regulatory compliance could clear up a lot of uncertainty and thrust the industry in the right direction. Levitt explained:
“The intellectual firepower behind [Bitcoin] enterprises is astonishing. But I think in terms of compliance and regulations, they are relatively immature.”
To David Berger, founder of The Digital Currency Council, this news from Levitt is a key development for the digital currency world. "For someone of Levitt's stature to add his imprimatur to these companies provides further evidence of the maturation of the Bitcoin space," said Berger. "It also highlights the degree to which so many emerging players in Bitcoin have realized the importance of adding smart, knowledgeable legal minds to their teams."
Vaurum CEO, Avish Bhama commented on the news:
“Blockchain technology is poised to transform the financial services world, but will continue to remain an intellectual curiosity until it has a compelling everyday use case. Arthur Levitt brings additional validation to the space, and we’re pleased to work with him on our financial controls, banking relationships and regulatory compliance.”
The SEC and Bitcoin
The Security Exchange Commission is the agency charged with regulating the U.S. securities industry and the exchange of stocks and options. Coincidentally, the agency may be stepping up its role in the Bitcoin sector. The SEC allegedly recently sent out notices to companies engaged in cryptocurrency crowdsales to request information.
Bitcoin company compliance is certainly immature in the U.S., but several regulatory fronts have recently cropped up. BitLicense proposes to license Bitcoin companies in New York. While on Monday, the U.S. Financial Crimes Enforcement Network (FinCEN) ruled that Bitcoin payment processors and exchanges are money transmitters. Essentially this means that the two types of companies fall under the agency's jurisdiction. These types of companies must apply for licenses from the agency.
Prior to this, none of these entities had issued any sort of guidance. But the Wild West atmosphere is breaking apart as companies gauge how regulators will approach their business operations.
And now a high-ranking former regulator is advising two of these companies. Levitt also advises other U.S. financial outfits like Goldman Sachs and the American International Group's board of investors. Tony Gallippi, BitPay Co-founder and Executive Chairman commented on the new addition:
“Bitcoin is a technology innovation that offers capabilities and speeds of payments that have never been possible before. Arthur’s experience and reputation are incredible assets to a rapidly innovative company like BitPay, and with his advice we hope to better navigate the financial industry and build a successful business.”
BitPay is an Atlanta-based payment service provider. Vaurum is a Bitcoin exchange that raised $4 million in seed funding from the likes of investor Tim Draper this spring.
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