Lacewell said on the podcast that the small office that handled cryptocurrency has been converted into a full-fledged division “parallel in scope and status as our banking and insurance division.”
The state’s relationship with the fintech industry has evolved since the early days, when the BitLicense regime drew complaints of inadequate and inefficient application processing and a perceived lack of technological expertise.
Kraken, a global bitcoin exchange, discontinued service to New York residents several years ago, laying the blame for the decision on BitLicense.
“Regrettably, the abominable BitLicense has awakened,” the company said in 2015. “It is a creature so foul, so cruel that not even Kraken possesses the courage or strength to face its nasty, big, pointy teeth.”
And in 2019, a public spat between the department and Bittrex, a Seattle-based virtual currency business, erupted after New York denied the company a BitLicense because of numerous deficiencies, including weak customer due diligence and an absence of experienced compliance staff. Bittrex accused the department of overstepping its regulatory authority and changing rules on the fly, saying the “personal and vindictive” decision would drive fintech away from the state.