BitLicense architect Ben Lawsky has joined fintech startup Ripple’s Board of Directors.
Lawsky, a former federal prosecutor, was a thorn in the side of Wall Street banks during his tenure as the first-ever superintendent of the New York State Department of Financial Services. However, in the cryptocurrency ecosystem, he is best known for the role he played in regulating the nascent bitcoin industry.
To that end, he was instrumental in creating New York’s controversial digital currency regulatory framework, more commonly known as the BitLicense. Though embraced by some larger bitcoin firms, many smaller startups found complying with the regulations to be untenable, leading to the “Great Bitcoin Exodus” in 2015. ShapeShift CEO Erik Voorhees, for instance, called the framework “Orwellian” and said that the regulations made customer information vulnerable to cyber attacks.
Shortly after the BitLicense was finalized, Lawsky departed from the agency to found a consulting group that, among other topics, advises bitcoin firms on how to maintain regulatory compliance. However — despite the departure’s poor optics — Lawsky is not allowed to consult with companies who are seeking to apply for a BitLicense.
Now, Lawsky has been appointed to the Ripple Board of Directors — a move that is likely intended to assuage the concerns of mainstream financial institutions who are cautious about integrating their products with Ripple’s enterprise blockchain platform — and particularly with XRP, the native currency of the Ripple Consensus Ledger.
“Ripple is the leading enterprise blockchain company in the world today and is one that truly understands the importance of regulation-enabled innovation,” said Lawsky in a media release that accompanied the announcement. “The company and its leadership are passionate about making our global financial system more efficient, more secure and more fair.”
Ripple, incidentally, was the first company to receive a BitLicense for an institutional use case of digital assets (and the fourth company overall).
Last week, the company announced a major partnership with credit card giant American Express to form a U.S. to U.K. payment channel that will utilize Ripple’s enterprise blockchain to settle international payments in seconds.
Featured image from YouTube/City & State.
Last modified: June 10, 2020 11:40 AM UTC