New NYDFS Division to Oversee Licensing for Cryptocurrency Startups

The New York State Department of Financial Services (NYDFS), the financial regulator for the state of New York, is moving its in-house team supervising cryptocurrency businesses to a new division.

In a statement Tuesday, Linda Lacewell, the newly appointed superintendent, announced the Research and Innovation Division at the Department of Financial Services will track emerging financial technologies and be “responsible for licensing and supervising virtual currencies.”

This will include licensing approvals made under the state’s BitLicense, a regulatory regime that governs firms buying, selling or issuing cryptocurrencies to consumers in the state, the agency affirmed in a follow-up request for comment.

“This division will oversee the virtual currency licensing process and will encourage development in the area,” the NYDFS said.

Lacewell’s predecessor, Maria T. Vullo, opposed regulatory experimentation for non-banking financial firms when leading the…