New York financial regulators are concerned about virtual currency influence in “Wild West”, investigating such virtual currencies as one of the most popular- Bitcoin. Superintendent of the state’s Department of Financial Services, Benjamin Lawsky, stated that they are contemplating new regulations for virtual currencies.
Virtual currency is known for being an unregulated currency and Bitcoin was stated to be regulation- free in 2009. Virtual currency is base on mathematical schemes which fights against tampering and maintains its authentication.
Just like money, virtual currency can be used for any purpose, both legal and illegal causes. Benjamin Lawsky expresses his opposition about unregulated digital currency and states that virtual currency has been used for narcotics purchase, guns and child pornography.
"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."
22 subpoenas were produced last week, regarding the information about anti- money laundering measures, investment materials and consumer protections. The investigation of the issues is at its very beginning, but the Department of Financial Services is very concerned about money transmission, which is under agency regulations. Lawsky expounds that putting safeguard regulations on virtual currency is going to play a positive role and be beneficial to the long- term strength of the virtual currency itself.
Bitcoin has been slowly increasing in its value over recent years. For example, this spring the price shot up from 40 U.S. dollar to 266$. However, right after that the price slumped back to 40$. The reason for that was said to be the limitation on capital leaving Cyprus after clasping down on banks and confiscating deposits.
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