The New York State Department of Financial Services (NYDFS) – the state’s financial regulator – is establishing a new division that will be in charge of licensing as well as regulating crypto-related businesses, and moving its in-house team supervising cryptocurrency businesses to the new division.
In an official statement, the NYDFS introduced the new division at the Department of Financial Services, which will be named the Research and Innovation Division, and it will be responsible for assessing emerging financial technologies as well as licensing and supervising virtual currencies.
The agency further confirmed that the division will also be responsible for licensing approvals made under the state’s BitLicense, a regulatory body system that manages firms buying, selling or issuing cryptocurrencies to consumers within the New York state.
In addition to that, the report brought attention to a number of appointments to the division. Particularly, the new division will be led by Matthew Homer, who previously served as the head of policy and research a fintech firm called Quovo as well as had worked at the Federal Deposit Insurance Corporation and the United States Agency for International Development.
Matthew Siegel and Olivia Bumgardner – two deputy superintendents – will serve under Homer. Prior to this, Siegel was a trial attorney at the Antitrust Division of the U.S. Department of Justice, and had worked at the Assistant Attorney General in the Antitrust Bureau of the New York State Office of the Attorney General.
At the moment, Bumgardner is the director of research at NYDFS and has previously led initiatives and projects related to cybersecurity, financial inclusion and digital currencies. Andrew Lucas, who was previously senior counsel at the New York City Law Department, will be counsel to the new division.
Linda Lacewell, the newly appointed superintendent has stated:
“This new division and these appointments position DFS as the regulator of the future, allowing the Department to better protect consumers, develop best practices, and analyze market data to strengthen New York’s standing as the center of financial innovation.”
Lacewell strongly believes that “the financial services regulatory landscape needs to evolve and adapt as innovation in banking, insurance and regulatory technology continues to grow.”
Meanwhile, the NYDFS has been regulating crypto-related businesses since 2015, when its BitLicense program came into effect. Seemingly, the financial regulator had only granted eight BitLicenses in the first three years of operating. At the moment, there have been over 20 licenses granted to cryptocurrency firms.
Most recently, Lacewell had approved two subsidiaries of the crypto exchange Seed CX to operate in the state under the BitLicense.