The New York Department of Financial Services (NYDFS), the financial regulator for New York state, has created a new department which will be responsible for licensing and crypto-related businesses. 

In one of the statements on July 23, Linda Lacewell, the newly hired superintendent, declared that the formation of the Research and Innovation Division will monitor the Department’s division responsible for licensing and supervising virtual currencies, and it will review new efforts to use technology to tackle financial exclusion.

The NYDFS demands that the businesses working on the insurance and trade of digital assets get a unique type of registration known as BitLicense. This process claims to make sure that the crypto-related businesses observe some standards about disclosure and consumer-data protection; however, it is found by some in the crypto space as exclusive to the industry. 

BitLicense is mainly a regulatory rule that commands firms buying, selling or issuing cryptos to consumers in the state, the agency said in one statement.

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

Lacewell’s ancestor, Maria T. Vullo, against regulatory experimentation for non-banking financial firms while leading the agency, marking this research and innovation division as a stay from the regulator’s formerly heavy hand.

Lacewell stated: 

“The financial services regulatory landscape needs to evolve and adapt as innovation in banking, insurance, and regulatory technology continues to grow.”

Apart from declaring the new Research and Innovation Division, today’s statement points to various appointments to the division. Mathew Holmer will manage the new division, before NYDFS he was working as a head of policy and research in a fintech company known as Quovo. Holmer has also worked at the Federal Deposit Insurance Corporation and the United States Agency for International Development.

Matthew Siegel and Olivia Bumgardner, two deputy superintendents, will be working under Homer. Siegel has earlier worked as a trial attorney in the Antitrust Division of the U.S. Department of Justice. Before this, he has worked as an Assistant Attorney General in the Antitrust Bureau of the New York State.

Bumgardner is presently the director of research at NYDFS. She has earlier worked in initiatives and projects linked to cybersecurity, financial inclusion, and cryptocurrencies. Andrew Lucas, who pr worked as a senior counsel at the New York City Law eviouslyDepartment will be Counsel to the Research and Innovation Division.

The NYDFS is managing the firms since 2015 when the BitLicense program was introduced. The rule has affected some of the famous cryptocurrency firms such as ShafeShift.

The agency has mainly provided eight BitLicenses in the first three years of implementation. Presently, 20 licenses have been given to crypto firms.