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Former Bitcoin Regulator Turns Blockchain Advisor

Last Updated March 4, 2021 4:48 PM
Lester Coleman
Last Updated March 4, 2021 4:48 PM

Former New York regulator Benjamin Lawsky, who oversaw what many consider the most restrictive state bitcoin regulation known as BitLicense, now works as a counsel and media liaison for Axoni, a blockchain technology firm that uses blockchain in settling derivative transactions, according to Reuters .

Benjamin Lawsky
Benjamin Lawsky

Lawsky said he intended to start a consulting business when he announced his departure from the New York Department of Financial Services last spring, CCN.com reported. As a regulator, Lawsky had a reputation for consistently pushing for larger fines and stricter rules.

Lawsky’s firm, the Lawsky Group, plans to represent other blockchain clients. A member of the team is Matthew Anderson, who was a spokesman for the New York Department of Financial Services when it was developing the BitLicense.

“We’ll be doing a broad range of financial consultancy … and some financial technology public relations,” said Anderson.

The Lawsky Group website  says the firm provides counsel on financial services regulation, cybersecurity, cyber-risk, compliance, new financial technologies, consumer protection, crisis management, privacy, anti-money laundering controls, and investigations in the insurance, banking, and related industries.

Lawsky last June said he wanted to implement “guard rails that protect consumers and root out illicit activity without stifling innovation.”

Bitcoin Community Mixed

The bitcoin community has mixed reactions to Lawsky’s new role.

Pamela Morgan, CEO of Third Key Solutions, which consults for companies that use digital currency, said the most interesting aspect of Lawsky’s new venture is that it shows the close relationship between regulators and those who are regulated. She called Lawsky’s new role “crony capitalism at its finest.”

Adam Draper, CEO of venture capital firm Boost VC, called it fantastic that Lawsky has entered the private sector and continued to support bitcoin and the blockchain.

Some noted that Lawsky’s ability to interact with the media as a regulator is a strength he now uses in his new role.

Also read: Circle Internet Financial receives New York State’s first BitLicense

Lawsky Defended BitLicense

Lawsky said his goal for the controversial BitLicense was to establish a balance between protecting consumers and allowing software developers the ability to create bitcoin products.

The BitLicense drew criticism from bitcoin companies, investment firms and advocacy organizations. Critics believed the BitLicense would become a model for other states and make it difficult for bitcoin services to expand.

Erik Voorhees, founder and CEO of ShapeShift, the Switzerland-based digital currency exchange, compared Lawsky’s bitcoin crackdown to North Korean communism.

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