| March 11
March 11 In a step toward eventual state
regulation of bitcoin exchanges, New York's financial services
regulator on Tuesday said he wanted companies that want to
operate a virtual currency exchanges in the state to submit
In a statement, New York Superintendent of Financial
Services Benjamin Lawsky said a formal application process would
be a precursor to regulations it intends to propose by the end
of the second quarter.
Virtual currencies are dominated by bitcoin, now well-known
after the failure of Mt. Gox, a Tokyo-based exchange that filed
for bankruptcy in Japan and the United States after losing an
estimated 850,000 in customer bitcoins, or about $560 million.
Bitcoin is a digital currency that, unlike conventional
money, is bought and sold on a peer-to-peer network independent
of central control. Its value has soared in the last year, and
the total worth of bit coins minted is now about $7 billion.
"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," Lawsky said in a statement.
In January, the New York regulator held two days of hearings
with industry participants, including the investor twins Cameron
and Tyler Winklevoss, and said he planned to issue "BitLicenses"
to virtual currency firms.
In a Reddit exchange last month, Lawsky commented: "The Mt.
Gox issue underscored for us that it would be far easier if we
had some exchanges locally that we could interact with, allowing
us to better understand these issues so as to protect those
engaging in trades with the exchanges. We're hopeful that clear
regulations, if done in a smart, modern way, may incentivize
some of these exchanges to come ashore (hopefully here in New