Home / Capital & Crypto / Erick Voorhees: Lawsky’s Bitcoin Crackdown Is Like North Korea, Creates Security Risks

Erick Voorhees: Lawsky’s Bitcoin Crackdown Is Like North Korea, Creates Security Risks

Last Updated March 4, 2021 4:44 PM
Lester Coleman
Last Updated March 4, 2021 4:44 PM
Erik Voorhees
Erik Voorhees

Erik Voorhees, founder and CEO of ShapeShift, the Switzerland-based digital currency exchange, views Ben Lawsky’s bitcoin crackdown as alarmingly similar to North Korean communism. Voorhees made the comparison between Lawsky, the architect of New York State’s BitLicense, and North Korea in an interview  with The New York Post.

Voorhees is not the only bitcoin enthusiast who isn’t standing in line to sign up for Lawsky’s soon-to-be launched bitcoin consultancy. (Lawsky recently said he plans to begin a consultancy when he leaves his role as head of the New York Financial Services Department, a move that drew a heated response from the bitcoin community.)

Is Lawsky as bad as Kim Jong Un?

Voorhees was reserved in comparing Lawsky to North Korean dictator Kim Jong Un. He told The New York Post that Lawsky is not as bad as Kim Jong Un, but he does require the same spying provision on his citizenry.

In Voorhees’ view, the BitLicense that took effect last month collects an “Orwellian” amount of information on users and creates security risks.

He said the BitLicense regulations “re-connect” personal information to transactions that would be anonymous otherwise. Hence, he sees these regulations as creating a cybersecurity risk.

Voorhees stands among many bitcoin enthusiasts who hope other states do not follow New York’s lead in regulating the digital currency. The best news to come out of the New York BitLicense is that it will instigate conversations in other states that could have a different outcome.

Lawsky has said his goal is to establish a balance between protecting consumers and allowing software developers the ability to create bitcoin products. His defense has not convinced many bitcoin enthusiasts. Particularly after he announced that he will depart the department in June to form a consulting business that will offer virtual currency advisory services.

Also read: Bitcoin regulator Benjamin Lawsky might resign from NYDFS

Will other states follow New York?

Bitcoin enthusiasts are concerned that other states will follow New York’s laws in developing their regulations.

A spokesperson for the New York Department of Financial Services told The New York Post that prudent regulation will help build greater consumer confidence in digital currency and spark wider adoption. Bitcoin supporters were successful in reducing the number of companies, such as software developers, that will need to be licensed.