Former NYDFS Superintendent Benjamin Lawsky Denies BitLicense Cronyism Allegations

Former New York State Department of Financial Services (NYDFS) superintendent Benjamin Lawsky denied allegations from the Bitcoin community suggesting he created the BitLicense as a setup for his newly established legal firm, The Lawsky Group. Lawsky said he is not allowed to work on anything related to the BitLicense for the rest of his life.

Lawsky countered the criticism during an interview with American Banker editor in chief Marc Hochstein. The interview, held at the American Banker Digital Currencies + the Blockchain Conference in New York City, was Lawsky’s first public appearance since he stepped down as a regulator. 

While the interview did not specifically focus on Bitcoin or the BitLicense, Lawsky did touch on the allegations of cronyism made against the former lawmaker. Lawsky emphasized that he was not allowed – by law – to work on anything concerning the BitLicense. 

Interviewing Lawsky, Hochstein specifically asked: 

“To clear the air, what would you say to someone who would think that maybe you built yourself a revolving door?” 

To which Lawsky responded:

“The rules are very clear. I can’t work at all for life on anything I ever worked on. If anyone said ‘I want to hire you to help get a BitLicense from DFS’, no can do.” 

The former regulator did note he can still offer legal advise to Bitcoin or cryptocurrency related companies, as long as it’s not related to the BitLicense. Lawsky did not rule out taking on such clients. 

Lawsky has received a lot of criticism from the Bitcoin community over the BitLicense. The BitLicense is the set of rules and regulations that Bitcoin and cryptocurrency companies servicing customers in New York need to comply with if they want to do business in the state. According to Lawsky, the BitLicense is installed to protect consumers and root out illicit activity without stifling innovation. 

Several prominent entrepreneurs and thought leaders within the Bitcoin space have publicly spoken out against such regulation, however. Some of the most prominent critics of the law include current Bitcoin Foundation director Bruce Fenton and Shapeshift CEO Erik Voorhees. The latter even withdrew his service from the state of New York in protest to the BitLicense, and started a campaign against the regulations. 

Lawsky left his department little over a month ago on June 16, having run the agency for four years. He registered his own law firm, The Lawsky Group, one day later, on June 17. News that Lawsky would consult Bitcoin companies first appeared in The New York Post.

Benjamin Lawsky, the former superintendent of NYDFS

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