New policies under consideration to regulate emerging virtual currency industry.
A New York bank regulator has sent subpoenas to 22 firms using the digital currency Bitcoin.
The demand for details about the company’s use of the currency is part of the New York State’s Department of Financial Services’ (DFS) efforts to determine whether new policies should be adopted to regulate the emerging industry.
DFS Superintendent Benjamin Lawsky said that 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," Lawsky said.
"It is vital to put in place appropriate safeguards for consumers and law-abiding citizens."
Under the latest DFS regulations, firms involved in money transmission will have to guarantee improvements to the security of customer account funds.
Bitcoin firms are also expected to undergo periodic safety and soundness assessments, while complying with appropriate anti-money laundering laws, which would assist money transmitters to boost security for consumers and eliminate illegal activity.
DFS is considering issuing new regulatory guidelines specific to virtual currencies rather than applying the existing money transmission policies.
Lawsky said: "We look forward to working with the virtual currency industry and other stakeholders as our inquiry proceeds, and we move to put in place appropriate regulatory guardrails to protect consumers and our national security."