Benjamin Lawsky, the Man behind ... - Live Bitcoin News

New York regulator Benjamin Lawsky moving ahead on Bitcoin regulation

New York regulator Benjamin Lawsky moving ahead on Bitcoin regulation submitted by vocatus to Bitcoin [link] [comments]

Benjamin Lawsky discusses New York’s plans for Bitcoin regulation on BBC

Benjamin Lawsky discusses New York’s plans for Bitcoin regulation on BBC submitted by TheBTC-G to Bitcoin [link] [comments]

We Can Police Bitcoin: Benjamin Lawsky, New York superintendent of financial services

We Can Police Bitcoin: Benjamin Lawsky, New York superintendent of financial services submitted by hietheiy to altnewz [link] [comments]

New York's Financial Regulator, Benjamin Lawsky, Maintains Lead On Bitcoin Regulation

New York's Financial Regulator, Benjamin Lawsky, Maintains Lead On Bitcoin Regulation submitted by BTCNews to BTCNews [link] [comments]

New York Regulator Benjamin M. Lawsky Outlines Changes to Bitcoin Rules (NYtimes)

New York Regulator Benjamin M. Lawsky Outlines Changes to Bitcoin Rules (NYtimes) submitted by youcancallmejoey to Bitcoin [link] [comments]

New York's Financial Regulator, Benjamin Lawsky, Maintains Lead On Bitcoin Regulation

New York's Financial Regulator, Benjamin Lawsky, Maintains Lead On Bitcoin Regulation submitted by cryptocurrencylive to CryptoCurrencyLive [link] [comments]

New York Regulator Benjamin M. Lawsky Outlines Changes to Bitcoin Rules (NYtimes)

New York Regulator Benjamin M. Lawsky Outlines Changes to Bitcoin Rules (NYtimes) submitted by moon_drone to BetterBitcoin [link] [comments]

XRP Isn’t A Security, Declares Former CFTC Chairman

XRP Isn’t A Security, Declares Former CFTC Chairman
https://preview.redd.it/8yehv8lzsce51.jpg?width=960&format=pjpg&auto=webp&s=69f0a6eb4973a5a9974e42d15709434719a26a81
When Chris Giancarlo was the chairman of the Commodity Futures Trading Commission he became a rock-star of sorts in certain corners of the cryptocurrency community, helping establish criteria that eventually led to bitcoin and ethereum being declared commodities, more like coffee or sugar than stock in a company. The U.S. Securities and Exchange Commission largely followed suit, eventually also declaring that bitcoin and ether, the cryptocurrency powering the ethereum blockchain weren’t securities.
Now chairman emeritus Giancarlo, who was deemed “Crypto Dad” following an impassioned speech he gave to Congress where he credited bitcoin for finally getting his kids interested in finance, is at it again, having co-written a detailed argument published this morning in the International Financial Law Review for why XRP, the cryptocurrency formally known as “ripples,” was also not a security. The only problem is he’s no longer a regulator. In fact, his employer is on the payroll of Ripple, the largest single owner of XRP, whose co-founders actually created the cryptocurrency.
The bombshell paper, titled, “Cryptocurrencies and U.S. Securities Laws: Beyond Bitcoin and Ether,” co-authored by commodities lawyer Conrad Bahlke of New York law firm Willkie Farr & Gallagher LLP, methodically reviews the criteria of the Howey Test, established by the SEC in 1946 to determine whether something is a security, and point-by-point argues that XRP does not qualify. Rather, the paper argues, like its name would indicate, cryptocurrency is a currency of perhaps more interest to the Federal Reserve and central banks than securities regulators.
What’s at stake here to the cryptocurrency world cannot be overestimated. XRP is now the fourth largest cryptocurrency by market cap, with $5.9 billion worth of the asset in circulation according to cryptocurrency data site Messari. While Ripple was valued at $10 billion according to its most recent round of funding, the company continues to fund itself in part by selling its deep war chest of 55.6 billion XRP, coincidentally valued at the same amount as the company itself.
Not only could an eventual decision by the SEC to classify—or not classify—XRP as a security impact the untold individual owners of the cryptocurrency, but other clients using Ripple services that don’t rely on the cryptocurrency, including American Express, Santander, and SBI Holdings could stand to be impacted positively or negatively depending on the decision. After all if XRP were to be rescinded it would be a huge cost to their software provider. If Giancarlo is right though, Ripple could end up being one of the most valuable startups in fintech.
“Ultimately, under a fair application of the Howey test and the SEC’s presently expanding analysis, XRP should not be regulated as a security, but instead considered a currency or a medium of exchange,” Giancarlo and Bahlke argue in the paper. “The increased adoption of XRP as a medium of exchange and a form of payment in recent years, both by consumers and in the business-to-business setting, further underscores the utility of XRP as a bona fide fiat substitute.”
Giancarlo was nominated to be a commissioner of the CFTC by then-President Barack Obama in 2013. In 2015, he helped lead the thinking behind the CFTC’s decision that bitcoin and other cryptocurrencies were commodities, paving the way for the SEC’s related comments that neither bitcoin nor ethereum are securities. Then, at the height of the 2017 cryptocurrency bubble President Trump nominated him to be Chairman of the CFTC, where he oversaw the creation of a number of bitcoin futures projects, including at CME Group and the short-lived effort at Cboe.
While many blame the creation of bitcoin futures for popping the 2017 price bubble, which almost hit $20,000 before halving today, others have seen the works as a fundamental process of maturity, helping pave the way for more sophisticated crypto-enabled financial offerings. Giancarlo’s last day in office at the CFTC was in 2019, after which he promptly got involved helping envision the future of assets issued on a blockchain. In November he joined as an advisor to American Financial Exchange, using ethereum to create a Libor alternative. The following January he co-founded the Digital Dollar Project leading the push to use blockchain at the Federal Reserve and now it would seem he’s hoping to influence the classification of XRP as he did for bitcoin and ethereum, but from the other side of regulation.
Importantly however, a footnote in the report discloses that not only is Giancarlo and Bahlke’s firm, Willkie Farr & Gallagher LLP counsel to Ripple Labs, but they “relied on certain factual information provided by Ripple in the preparation of this article.” While it’s impossible to parse what information came from the co-authors and what came from Ripple, the resulting legal argument is fascinating, even if it does leave room for doubt.
The Howey test Giancarlo uses to bolster his arguments is a three-pronged definition used by the SEC, none of which he says apply to XRP. The first prong, is that an investment contract should be implied or explicitly stated between the issuer of the asset, in this case XRP and the owner, in which money exchanges hands. “The mere fact that an individual holds XRP does not create any relationship, rights or privileges with respect to Ripple any more than owning Ether would create a contract with the Ethereum Foundation, the organization that oversees the Ethereum architecture,” he writes.
This does however overlook the fact that OpenCoin, credited on Ripple’s own site in 2013 for creating XRP (then tellingly described as “ripples”), was run by many of the same people that founded Ripple. The original creators of XRP then donated the vast majority of the assets to Ripple, which they also ran, creating a sense of distance, tacit though it may be. The actual data around the creation of XRP was also muddled by a glitch in the code that means unlike bitcoin and ethereum the crucial genesis data is no longer attached to the rest of the ledger. The rebranding of “ripples” as XRP further extended the sense of distance between XRP and Ripple, followed by an aggressive campaign to get media to stop describing the cryptocurrency as “Ripple’s XRP.”
With so much distance between the company that actually created XRP and the company that now owns more than half of it, one would be forgiven for wondering, if there was an implied contract between OpenCoin and XRP owners, does the donation from one group of people at one company to a very similar group of people at another company sever that responsibility? In spite of the sense of distance created by Ripple between itself and the cryptocurrency its co-founders created, a number of active lawsuits alleging securities violations have been filed. In all fairness though, Giancarlo appears to recognize this prong may not be Ripple’s strongest defense and concludes the section, hedging: “Even if XRP were to satisfy one or two of the “prongs” of the Howey test, it does not satisfy all three factors such that XRP is an investment contract subject to regulation as a security.”
The second prong of the Howey test stipulates that there can be no “common enterprise” between shareholders or a shareholder and the company. While refuting both relationships, Giancarlo curiously goes onto to write that “given the juxtaposition between XRP’s intended use as a liquidity tool, its more general use to transfer value and its potential as a speculative asset, XRP holders who utilize the coins for different purposes have divergent interests with respect to XRP.”
Ironically, there has always been a widely held belief that owning a cryptocurrency would unify interests around a single goal: to co-create the infrastructure that lets the cryptocurrency exist and ensure it was vibrant and diverse. Meanwhile, XRP, in spite of its aggressive supporters on social media, is one of the least diverse ecosystems, with the vast majority of serious development being done within Ripple. If XRP owners aren’t expecting an increase in value from the work being done by Ripple, they certainly aren’t nearly as involved in helping build that future as are owners of bitcoin and ethereum.
In a related issue, the third prong of the Howey test stipulates that “no reasonable expectation of profit should be derived from the efforts of Ripple,” according to the paper. Supporting this position, Giancarlo writes: “Though Ripple maintains a sizable stake of the XRP supply and certainly has a pecuniary interest in the value of its holdings, it is not enough to suggest that a mutual interest in the value of an asset gives rise to an expectation of profits as contemplated by Howey.” Again, this strains credulity.
According to its own site, Ripple currently has access to 6.4% of all the XRP ever created. But that doesn’t count the 49.2% of the total XRP Ripple owns, but is locked in a series of escrow accounts that become periodically available to Ripple and Ripple alone. Adding those two percentages together leaves a float of only about 44% of XRP that has been distributed for public ownership. For some comparison, Facebook went public the same year XRP was created and has a 99% float, according to FactSet data, meaning almost all of its stock is in the hands of traders.While Ripple does also have more traditional stock, this distribution shows that Ripple might not be as distributed as it claims.
While it’s perhaps no surprise that Giancarlo would come out on the side of his own client, there’s also plenty of other reasons to believe his argument may in fact hold water. In February 2018, the notoriously compliant exchange Coinbase added support for XRP, something it would unlikely do if it were concerned it might accidentally be selling an unlicensed security. Perhaps most tellingly though, Ripple has also been granted a difficult-to-obtain BitLicense from the New York Department of Financial Services, giving it the blessing of a respected regulator. However, while the license was granted after then-superintendent Benjamin Lawsky stepped down from the regulator, it's perhaps no coincidence that a year later he joined Ripple on its board of directors and is now active in the cryptocurrency space. Perhaps a similar fate is in store for Giancarlo.
Editor’s note: This article has been updated to clarify that Ripple Labs is a client of Giancarlo’s law firm.
submitted by wazzocklegless to u/wazzocklegless [link] [comments]

NVIDIA is engaged in a proxy war for future of proof of work. They call it "progPOW" and the first target is Ethereum. We must stop it now before it reaches Bitcoin Cash. [censorship] [conspiracy]

I tried to post this in /ethereum, but was censored. My post was immediately flagged and the /etheruem subreddit moderators told me that I should post it in a mining subreddit. I have reason to believe that the Ethereum foundation, some of the /ethereum moderators, and some Ethereum developers have been compromised by NVIDIA through proxy agents/assets.
Since this subreddit was founded in anti-censorship, I felt it relevant to post here.
Furthermore, Bitcoin Cash will be in danger if progPOW is merged into the Ethereum codebase. If Ethereum forks to this new PoW algorithm, its proponents will use that as an excuse to lobby for its inclusion in Bitcoin Cash.
If you are interested in this topic, bookmark my username ugtarmas and read my previous posts on this topic. I will be posting more.
First up, my previous posts:
Archive: http://archive.is/kK1lE
Archive: http://archive.is/ZikY4
Next up, my post that was censored:
Now that my posts have put me on Kristy's Leigh Anne Minehan's radar, she and her various shills have begun to manufacture a smear campaign against me, and have attempted to implicate my company in "just someone else protecting their hardware investment".
I would like to address this head-on. Neither I, nor my company, have purchased ETH ASICs or any meaningful quantity of AMD GPUs. In fact, I bought over $100,000 worth NVIDIA GPUs {invoices}, and I am still arguing against progPOW.
As I have mentioned in my previous posts, progPOW will not stop ASICs, it will only increase the R&D cost of making them such that only the people closest to the algorithm will benefit. How do I know this? Well, because Kristy is already offering consulting to ASIC manufacturers who have already claimed that ASICs can be 8x faster than GPUs on progPOW.
Kristy and her team will have no shortage of work available helping ASIC manufacturers develop progPOW ASICs, and get paid handsomely for it. She has already proposed to work together with Linzhi. She has already worked on ASIC designs for Genesis Mining, Bitmain, and NVIDIA.
Imagine that you are an ASIC manufacturer and you want to complete with Bitmain, Linzhi, and NVIDIA. You do the R&D, which costs a few million. Then, right before you take your product to market, NVIDIA's influence in progPOW destroys your entire company. Now imagine that this happens to all potential ASIC competitors.
Meanwhile, Kristy's team offers paid consulting for all incumbent ASIC manufacturers. What could have been a healthy and competitive ecosystem is now dominated exclusively by a select few. The push for progPOW is nothing more than a cash grab by special interests. It reminds me of when Benjamin Lawsky pushed for the BitLicense bill, then immediately retired from the public sector and went to work for Ripple/XRP to help the private sector circumnavigate his very own BitLicense.
My only hope is that, before the ETH developers decide on forking to progPOW, they look at more than just its technical aspects, and look at the economic aspects. There are some people out that claim we must judge projects solely by its merits, but doing that misses the bigger picture. progPOW would not exist without the team responsible for making it, who stands to benefit massively from its inception.
Onward:
The connection between Core Scientific, NVIDIA, and progPOW (and possibly CSW/Coingeek)
submitted by ugtarmas to btc [link] [comments]

DD on Ripple's Board of Directors

With the appointment of Zoe Cruz, I did some research on the entirety of Ripple's board members and compiled in list form their employment history, accolades/awards, and other board relationships. I know most of this info is on Rippple's Board site, but having it in list form is sometimes easier for me to read and process.
I put this together for my own research, hoping this will be helpful to others. Seeing the many accomplishments and powerful connections Ripple's board has made me even more confident of my investment in XRP. To me, XRP is an investment in people, not just a currency or a technology. If I can trust the people running the show, it gives me more faith in XRP's future.
Most interesting person to research was Susan Athey. She is also on the Board at Expedia.com, who owns HomeAway, an AirBNB competitor. I know people have been guessing what those two household names are, and I've seen AirBNB including in the discussion. If people are speculating that AirBNB is one of the names, I think it makes sense that a competitor like HomeAway/Expedia should be considered as well. But this is just pure speculation.
If you're interested, Susan Athey also held a Quora session back in Jan 2016. She answered a couple questions on the future of Bitcoin and Ripple.
Anyways, here's the list:
Gene Sperling
*President, Sperling Economic Strategies (Present) *Director of the National Economic Council (2011-2014) *Counselor to Treasury Secretary Timothy Geithner (2009-2011) *Chief Economic Adviser for Hillary Clinton's 2008 Presidential Campaign *Director of the National Economic Council for the Clinton Administration (1996-2001) *Deputy Director of the National Economic Council for the Clinton Administration (1993-1996)
Founder and Director of the Center for Universal Education at the Council on Foreign Relations and the Brookings Institution.
Named one of the 100 Most Powerful People in Finance worldwide in 2013 by Worth Magazine. Named one of the 50 Most Powerful People in Washington by GQ in 2012.
Takashi Okita
*CEO, SBI Ripple Asia (2016-Present) *Co-founder and CEO, econtext Asia, leading provider of online payment services and e-Commerce solutions (2012-2015) *Co-CEO, SBI Research Co.,Ltd (2009-2015) *Co-founder and CEO, VeriTrans, leading online payment solution provider in Japan (2005-2015)
Non Executive Director of SOFTBRAIN Co,.Ltd. (2014-2017) Non Executive Director of Clara Online, Inc. (2015-2017) Council member for the Financial Agency of Japan (2014-2015)
Named one of the “100 People to Change Japan” in 2014 by Nikkei Business
Anja Manuel
*Co-founder and Managing Partner, RiceHadleyGates LLC (2009-Present) *Lecturer and Fellow, CISAC, Stanford University (2009-Present) *Counsel, WilmerHale (2007-2009) *Special Assistant to the Under Secretary for Political Affairs, Nicholas Burns, U.S. Department of State (2006-2007) *Associate, WilmerHale (2001-2005) *Investment Banker, Salomon Brothers International (1996-1997)
Board member:
Overseas Shipping Group, Inc. Flexport Inc. Center for a New American Security The Crown Prince of Bahrain The American Ditchley Foundation Governor Brown’s California Export Council
Benjamin Lawsky
*CEO, The Lawsky Group (2015-Present) *Superintendent of Financial Services, Department of Financial Services, New York (2011-2015) *Chief of Staff for Governor Andrew Cuomo, New York (2011) *Special Assistant to the Attorney General (2007-2010) *Assistant United States Attorney, US Attorney for the Southern District of New York (2001-2006) *Chief Counsel to Senator Charles Schumer, US Senate Judiciary Committee (1999-2001) *Trial Attorney, US Department of Justice (1997-1999)
Ken Kurson
*Senior Managing Director, Teneo Strategy (2017-Present) *Editor in Chief, Observer Media (2013-2017) *Columnist, Esquire Magazine (1996-2016) *Executive VP, Jamestown Associates (2008-2012) *COO, Rudy Giuliani Presidential Committee (2006-2008) *Deputy Communications Director , Giuliani Partners (2002-2006) *Editor at Large, Money Magazine (2000-2002) *Guest Analyst, CNN (1995-2000) *Editor of GreenMagazine.com, Bankrate, Inc. (1998-2000) *Staff Writer, Worth Magazine (1995-1997) *Associate Editor, United Media (1995-1996)
Named 2014's Journalist of the Year by Algemeiner magazine.
Brad Garlinghouse
*CEO, Ripple (2017-Present) *President and COO, Ripple (2015-2016) *CEO and Chairman, Hightail, formerly YouSendIt (2012-2014) *President, Applications and Commerce, AOL (2009-2011) *Sr. Adviser, SilverLake Partners (2009) *SVP Communications, Yahoo (2003-2008) *CEO, Dialpad Communications (2000-2001) *General Partner, @Ventures (1999-2000) *Bus Dev, @Home Network (1997-1999)
Board Member:
Ancestry.com (2013-2016) Tonic Health (2011-2016) Animoto (2012-Present)
Zoe Cruz
*Senior Advisor, Promontory Financial Group, LLC (2016-Present) *Independent Non-Executive Director, Old Mutual (2014-Present) *Founder and CEO, EOZ Global (2013-Present) *Founder and CEO, Voras Capital Management LP (2009-2012) *Co-President, Morgan Stanley (1982-2007)
On Forbes' Most Powerful Women list for three years, 2005 (#16), 2006 (#10) and 2007 (#34).
Susan Athey
*Professor, Stanford Graduate School of Business (2013-Present) *Professor, Harvard (2006-2012) *Professor, Stanford University (2001-2006)
Member, Board of Directors at Expedia, Inc. (2015-Present) Advisor, Nyca Partners (2014-Present) Consulting Economist, Microsoft (2007-Present) Advisor, XSeed Captial (2014) Member, President's Committee for the National Medal of Science (2011) Executive Committee Member, American Economics Association (2008-2010)
Numerous accolades, including:
John Bates Clark Medal (2007) Elaine Bennett Research Prize (2000) Elected to National Academy of Science (2012)
Chris Larsen
*CEO and Co-Founder, Ripple (2012-Present) *CEO and Co-Founder, Prosper.com (2005-2012) *CEO and Co-Founder, E-LOAN (1992-2005)
Advisor, Distilled Analytics, Inc. (2016)
Links used:
https://ripple.com/ripple_press/former-chief-white-house-advisor-gene-sperling-joins-ripple-labs-board-of-directors/ https://en.wikipedia.org/wiki/Gene_Sperling http://www.econtext.asia/ https://www.bloomberg.com/research/stocks/people/person.asp?personId=65309669&privcapId=7713659 https://www.linkedin.com/in/takashi-okita-ba03822b/ https://www.linkedin.com/in/anja-manuel-26805023/ http://anjamanuel.com/anjamanuelbio/ http://ricehadleygates.com/ https://en.wikipedia.org/wiki/Benjamin_Lawsky https://www.linkedin.com/in/ben-lawsky-6aa97014/ https://www.linkedin.com/in/ken-kurson-919a7a8/ http://www.teneoholdings.com/leaders/ken_kurson https://www.linkedin.com/in/bradgarlinghouse/ https://ripple.com/company/board-of-directors/ https://www.linkedin.com/in/zoecruz/ https://ripple.com/insights/zoe-cruz-joins-ripples-board-directors/ https://www.oldmutualplc.com/people/zoe-cruz.jsp https://www.forbes.com/lists/2007/11/biz-07women_The-100-Most-Powerful-Women_Rank_2.html https://en.wikipedia.org/wiki/Forbes_list_of_The_World%27s_100_Most_Powerful_Women https://www.forbes.com/lists/2005/11/Name_2.html http://www.expediainc.com/about/leadership/ https://www.linkedin.com/in/susanathey/ https://en.wikipedia.org/wiki/Susan_Athey https://www.linkedin.com/in/chris-larsen-7721772/ https://en.wikipedia.org/wiki/Chris_Larsen
[edited to deal with some spacing issues]
submitted by koodlemind to Ripple [link] [comments]

Another reason ripple could be added to Coinbase

In late November, Ripple announced the addition of Benjamin Lawsky as CFO. Lawsky previously worked in New York as the Superintendent of Financial Services where he was instrumental in the formation of the BitLicense, a controversial business license seen by many as overburdensome regulation for virtual currency related business. Most Bitcoin-related companies in New York subsequently left, while Coinbase, Circle, and Ripple Labs have been granted a BitLicense.
submitted by cletusrice to Ripple [link] [comments]

All cryptocurrencies are down... except for Ripple. This seems like a big bank scam to me.

The big bankers are behind Ripple.
Fucking Benjamin Lawsky, the man who nearly destroyed Bitcoin in New York, sits on their board of directors.
Ripple is a centrally-controlled "coin"... it shouldn't even be considered a cryptocurrency.
Ripple owns your coins and they own your accounts... they can freeze your accounts, withdraw money from your accounts, reverse transactions... just like a bank. Ripple has full control.
Ripple handed out millions of free coins to their executives. Talk about the epitome of "pre-mining".
Yet ALL cryptocurrencies are DOWN... except for Ripple?!? (Which shouldn't even be considered a cryptocurrency in the first place!)
Yep... smells like banker manipulation to me.
These bankers are not going down without kicking & screaming & fighting unfairly... just like the bankers have always done throughout history.
The "powers that be" will do all they can to try to stop cryptocurrencies from gaining a foothold. They are using the BCH availability on Coinbase as an opportunity to trash BTC and BCH (as well as all cryptocurrencies) by sowing fear and confusion amongst the masses. Typical of the “old and tired" institutions when the “new” idea comes along.
Fuck you, bankers!
Freedom shall win in the end.
submitted by scotty321 to btc [link] [comments]

NY Financial Services streaming link

http://www.totalwebcasting.com/view/?id=nysdfs
I believe it starts at 10 am est
Edit: it starts at 11:30 am est, thanks posiment
"New York’s superintendent of financial services, Benjamin Lawsky, moved publicly against Bitcoin startups last year, issuing subpoenas for information on their business, a move the companies complain has forced them to spend seed capital on lawyers. Tomorrow Lawsky is scheduled to convene two days of public hearings to consider whether New York should establish what he has called a “BitLicense.”
http://www.businessweek.com/news/2014-01-27/new-york-duels-california-to-write-bitcoin-rules
submitted by btc5ever to BitcoinMarkets [link] [comments]

Bitcoin 2017 a Comprehensive Timeline

Some of the most notable news and events over the past year:
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submitted by BitcoinChronicler to btc [link] [comments]

New York to Accept Bitcoin-Exchange Proposals to Speed New Rules (X Post from /r/bitcoin)

New York financial regulators said they will immediately begin accepting applications to operate exchanges for Bitcoin and other digital currencies to help speed the development of rules for that market. Benjamin Lawsky, the superintendent of financial services, announced the move in a statement today, saying his office will propose a set of rules for virtual-currency firms by the end of the second quarter.
Link to Lawsky's statement
Link to full PDF with guidance
submitted by montseayo to BitcoinMarkets [link] [comments]

Update on my lawsuit against NYDFS and the BitLicense.

Just a quick update on the New York Lawsuit against the NYDFS.
I just retained a great lawyer to help me fight the Department of Financial Services. The guy is a fighter; and he has worked extensively with retrieving looted art work by the Nazi's.
The state has put forward their best as well which mean that it is not that simple.
You can follow the progress here : https://twitter.com/A78gnstNYDFS
It only feels like yesterday when I was asking Benjamin Lawsky to think about Small Businesses: https://youtu.be/jzIuCzat_nk (2 years ago.)
Next chapter on October 31, 2016.
Theo Chino @TheoBitcoin http://www.article78againstNYDFS.com
submitted by theochino to Bitcoin [link] [comments]

New York Encounters Bitcoin Backlog

New York has enforced digital currency companies doing business there to get a BitLicense to hold clients reserves and exchange crypto coins for dollars and other regular currencies since 2015. The Department of Financial Services (DFS) was managed by Benjamin Lawsky when it developed those regulations, acting as an campaigner of virtual currencies when other regulators were still in doubt. Even though it stays vague whether such currencies will ever gain dominant approval, they are now part of a broader, promptly-increasing business that combines finance and technology, and which leading financial centers are keen to draw attention. For Corporations, a trademark of approval from a tough regulator cited a chance to win over clients who stayed reluctant about the product. With New York, it was an opportunity to get ahead of rivals around the world that were also trying to charm fintech industries.
After the regulations came into charge, Lawsky quit the agency. Few leading personnel with BitLicense expertise soon followed him. DFS has released just two BitLicenses. Another 15 operations are still pending, with four others retreated and four refused. Two virtual currency companies have received trust charters, which treat them more like traditional financial institutions. Patrick Murck, a lawyer and fellow at Harvard University's Berkman Klein Center for Internet & Society, said "by putting the managements together and having key staff members leaving almost thereafter, they really put the business behind the eight-ball in terms of competing with traditional service providers". Nearly all firms that were operating in New York when the regulations took effect can still do business there while waiting for a license. However, start-ups may face trouble raising money or expanding their business.
The digital-currency business is very small compared to traditional finance, but it has grown rapidly since bitcoin's launch in 2009. There are now other virtual currencies, and broader uses for underlying technologies that create and distribute them. The bitcoin market is now worth about $10.7 billion, compared to less than $1 billion just three years ago, according to the information site CoinDesk. Financial markets all over the globe have competed vigorously to entice new business, as the market has developed while some have depend on light-touch regulation, the appeal of New York's BitLicense was that it offered a clear permissible foundation. Nevertheless, the slow licensing process and strict requirements are driving some companies away. Application worth $5,000 to file, and once completed, can run 500 pages including everything from compliance manuals to executives' fingerprints. Regulators then drill deeper, asking for details of business models, organizational charts or ownership information. Washington State, has issued seven licenses to virtual currency companies since 2013 under its longstanding law for money transfer industries. North Carolina has licensed two. A uniform virtual currency law that any state can opt into is also in the works, and there has been talk of a possible federal charter.
More from ttm.news
submitted by abbyreedere to Bitcoin [link] [comments]

Reminder: Benjamin M. Lawsky promised that the NY bitcoin regulations would be released no later than May 31

End of May "at the latest."
law360.com/articles/646017/lawsky-says-bitlicense-could-change-to-ease-compliance
New York Superintendent of Financial Services Benjamin M. Lawsky said that the final BitLicense would be release by the end of May “at the latest.”
It's holding up the launch of at least one service (Gemini). Possibly others.
Bitlicense will come into effect January 2015
forexminute.com/bitcoin/nydfs-superintendent-benjamin-lawsky-resign-2015-49520
He previously stated January 2015 to be the month when BitLicense will come into effect.
Will resign in early 2015
insidebitcoins.com/news/nydfs-superintendent-lawsky-to-step-down-early-next-yea26217
The man who has been at the center of the bitcoin regulation firestorm is reported to be weeks from relinquishing his post. New York State Department of Financial Services Ben Lawsky will resign in early 2015, according to published reports. - Nov 10, 2014
That's an interesting coincidence. The Bitlicense was supposed to come into effect at the same time that he resigned. When his resignation was delayed until June 2015, the Bitlicense also happened to be delayed until June 2015.
Why does Lawsky struggle so much with the truth?
submitted by slowmoon to Bitcoin [link] [comments]

Altisource Portfolio Solutions S.A.

Altisource Portfolio Solutions S.A.
This is gonna be a long one.
"You don't have to know how much a man weighs to know he is fat."
Background:
Altisource Portfolio solutions "Altisource" was spun off from Ocwen Financial in 2009. Ocwen financial is a mortgage servicer. Of all the mortgage servicers, Ocwen is the most cost efficient, best run, and best capitalized. As a mortgage servicer, Ocwen acquires mortgage servicing rights (MSRs). Owners of MSRs collect a small fee from every mortgage payment it is servicing. Ocwen may service a mortgage by handling day to day tasks of servicing a loan, process payments, keep track of principal and interest paid, manages escrow accounts, initiate foreclosure, modify loan payments for subprime and delinquent loans and so on.
The reason Altisource was spun off from Ocwen in 2009 is because Ocwen's Chairman Bill Erbey knew the software division of Ocwen was not being valued properly within the business. Altisource is now incorporated in Luxembourg for tax reasons but it basically does everything a United States company would do. It files with the SEC, gets audited and does almost all business in the United States.
Thesis:
What does Altisource do?
From the 2013 10k-
"Altisource®, together with its subsidiaries, is a premier marketplace and transaction solutions provider for the real estate, mortgage and consumer debt industries offering both distribution and content. We leverage proprietary business process, vendor and electronic payment management software and behavioral science based analytics to improve outcomes for marketplace participants."
If you figured out what they did from reading that, congratulations, because I couldn't. I own the company and I still do not know all of the services they provide. What I do know is that more than half of Altisource's revenue is derived from Ocwen. Ocwen uses Altiosurce's state of the art servicing technology to service their loans. Altisource's technology allows Ocwen to be such a low-cost servicer. Altisource only provides their technology to Ocwen and no other servicers.
http://oraclefromomaha.files.wordpress.com/2014/04/1.png
In the above link, you can see the ways Altisource generates revenue. The main thing to know here is that Altisource generates a huge portion of their revenue from Ocwen. When Ocwen makes less modifications on loans, they use Altisource's services less so Altisource makes less money. When Ocwen modifies more loans then Altisource makes more money because Ocwen uses their serivices more. It provides a hedge against parts of their business that may struggle in a recession like any other business. During the natural economic cycle if there is a recession and Ocwen is modifying more loans because more homeowners cannot make payments then Altisource is making more money than they would during good economic times because Ocwen uses their services more. The more MSRs Ocwen acquires, the more Altisource makes.
Ocwen's growth (basically a quick long thesis on Ocwen)
When a bank loans money to an individual to buy a house, a mortgage is originated and an MSR is created. The bank then keeps the mortgage on its books or sells the mortgage to another entity. Perhaps Fannie or Freddie. But what happens to the MSR? The MSR is then sold to a servicer such as Nationstar, Walter Investment Management Corp, or Ocwen. The reason the banks or originator of the mortgage sell the MSR is because they cannot service it properly and/or they would lose money in the process of trying to service it. Because of Dodd Frank, banks are trying to get MSRs off their books even faster because they cannot service them efficiently as previously mentioned and because they will have to hold 250% more capital against the MSRs. All banks are moving away from owning MSRs and non-bank servicing is becoming a larger industry, and Ocwen is leading the way. Due to the high supply of MSRs that are wanting to be sold by banks the MSRs can currently be bought at a 20-30% yield. Ocwen can buy the most MSRs because they are the best capitalized and they use the most conservative balance sheet. Ocwen being the lowest cost operator provides them with a huge competitive advantage when bidding for MSRs as well. Ocwen will continue to lead the non-bank servicers in buying MSRs. Ocwen currently has $464 billion of unpaid principle balance of loans they are servicing and another trillion dollars of subprime (Ocwen specializes in subprime) UPB is expected to get into the hands of non bank servicers by 2018 (3-4 trillion in UPB of regular MSRs). Ocwen will get the most of that trillion dollars of UPB of any servicer because of their competitive advantages.
Another competitive advantage of Ocwen is their relationship Home Loan Servicing Solutions Ltd. HLSS was also created by Bill Erbey. HLSS provides the capital for Ocwen to service loans so Ocwen does not have to tie up their capital. In the future, HLSS will acquire more loans and allow Ocwen to sub-service them through a unique financing strategy. This strategy called the accretion model is a genius way to get capital for HLSS to afford a virtually unlimited amount of MSRs. HLSS pays a huge dividend and because of this dividend, HLSS trades above its tangible book value due to fixed income hungry investors who want a fat dividend. HLSS then issues more shares above tangible book value to then acquire more MSRs. Issuing shares above book value actually creates value for HLSS shareholders also instead of diluting value as many people would think issuing shares does. Those MSRs are then sub-serviced by Ocwen, who still uses Altisource's technology.
Ocwen is also getting into foreword and reverse mortgage origination so they can have a constant stream of MSRs.
Basically, Ocwen and HLSS are going to acquire more MSRs and Ocwen will be servicing more mortgages. More mortgages serviced by Ocwen = more revenue for altisource.
All MSR transactions have currently been stopped by a New York financial regulator but we will get to that issue later.
Share Repurchases
Up until a few months ago the laws of Luxembourg restricted the amount of shares that Altisource could repurchase. Altisource recently created a foreign subsidiary that does nothing called "MidCo" to hold all other parts of the business so there would legally be no restrictions on share repurchases. Until Altisource did this, they were repurchasing the maximum amount of shares that Luxembourg would allow.
Here is Altisource's entity structure to bypass Luxembourg share repurchase laws http://i.imgur.com/J6LPEc0.jpg
The highlighted dark blue entity will be the entity repurchasing unlimited shares because MidCo, its parent company is not in Luxembourg. How smart is that.
Altisource currently authorized the repurchase of up to 2.9 million shares. 2.9 million shares is 13% of their market cap. They could easily repurchase that amount. Altisource also just finalized a loan with BAC for $200 million to repurchase shares so the share repurchases will really start to kick into high gear with the new liquidity and cheaper price. Up until the sharp share price drop, Altisource was repurchasing for the past several months around $110. That shows the board and management think the company is undervalued at $110 and now it is at $84 and nothing fundamentally changed about the company.
Insider Purchases
During the past 6 months, 3 insiders have purchased at $102, $103, $106, and $120. Between 20% and 43% above current market prices. Bill Erbey also owns 30% of Altisource and 13% of Ocwen. His views are directly in line with other shareholders.
Bill Erbey and his Capital Allocation
Bill Erbey is the Chairman of Ocwen, Altisource Portfolio Solutions, Altisource Asset Management Corporation, Altisource Residential, and Home Loan Servicing Solutions. Bill has done a great job of creating shareholder value for Ocwen and Altisource shareholders. Bill has also greatly benefited from this because of his stakes in thise companies. Before the sharp share price drop due to outside forces, Bill compounded Ocwen's stock at 30% per year since 2002 WITHOUT including the Altisource spinoff which compounded itself since 2009 at almost 75% a year. Altisource then spunoff Altisource Residential and Altisource Asset Management. Every spinoff is a value creating machine. At one point AAMC had compounded 430% in a year and a half, although it was due to a stretched valuation. Bill is dedicated to doing whatever it takes to create shareholder value. He relocated to the Virgin Islands just to save Ocwen some money on taxes.
I once read a story about Bill in his Virgin Islands home and his electric bill for the air conditioning. Keep in mind, Mr. Erbey is a multi billionaire. Bill got his electric bill and saw his costs had skyrocketed due to his air conditioning. Bill then sat there after that baking and sweating in the heat in his home so he could save a couple thousand on his electricity bill. He will do anything to save a dollar.
Hubzu
Hubzu is owned by Altisource. Hubzu is currently an online marketplace to buy and sell foreclosed homes. Like Zillow and Trulia but for foreclosed homes. Hubzu takes foreclosed homes from Ocwen and lists them on their website Hubzu.com. Hubzu is trying to get into the non-distressed house listing like other real estate websites like Zillow and Trulia. This will grow Hubzu at an even faster rate. Altisource states Hubzu gets about 1 million unique new visitors per month. When you buy Altisource you are also buying the jewel of Hubzu. Bill Erbey claims that Hubzu makes "as much money in one quarter as Zillow does in 4 quarters" Zillow has a market capitalization of $5 billion. Zillow's market capitalization is definitely stretched but a spinoff would create a lot of shareholder value even if the market gave Hubzu a fraction of Zillow's valuation.
Why is the company undervalued?
All this greatness in one company so why is it so undervalued? Remember how Altisource's earning were pretty much directly tied to how well Ocwen does? A New York State Financial Department regulator named Benjamin Lawsky halted a $2.7 bilion ($39 billion in UPB) Wells Fargo MSR transfer to Ocwen. This also halted all of the other MSR transactions between banks and servicers. Benjamin Lawsky is probing into Ocwen and other servicers. He states that he wants to make sure Ocwen and other servicers have the capacity to service loans efficiently because they are "growing too fast". The relationships these 5 companies share though is somewhat sketchy. They have a lot of the same board members and they all work with each other and make money off each other. Ocwen is the best servicer of them all though. They provide more loan modifications than anyone else and they have the lowest re default rate.
A slide from an investor presentation shows how they compare to others http://i.imgur.com/YkIKD2O.png
Even if Lawsky did find that some servicers do not have the capacity to service loans then Ocwen would be the last one in question because it is easy to see they are doing the best for their consumer compared to anyone other servicer.
Benjamin Lawsky is doing this for his own political reasons. He wants his name on the news. He wants people to see his name. Perhaps he wants to run for governor or something. Why would he schedule an interview with CNBC about the probe into the mortgage servicers right after it is announced. Why would he send a letter to Altisource and at the same time send it to the press, therefore ruining Altisource's reputation without giving them a chance to respond. He is also really into regulating bitcoin in New York which is just another vehicle to get his name in the news.
There are very recent updates with the regulatory pressure and basically the probing is narrowed down to an issue with force placed insurance and Altisource. Ben Lawsky could not find anything else. He sent this letter on Aug. 4th to Ocwen. So this is what the probe is narrowed down to.
http://www.dfs.ny.gov/about/press2014/pr140804-ocwen-letter.pdf
Basically, if a homeowner is struggling to make payments and can't pay their insurance, Ocwen has the right to force place insurance into their payments so the mortgage owner does not incur massive losses if a catastrophe happens. Ocwen has to outsource whoever force places the insurance and the issue that Ben Lawsky was worried about was why Altisource was appointed to find someone to force place that insurance, why Altisource received commission for basically doing nothing, and why Bill Erbey did not consult with any of the Ocwen board before making this decision to allow Altisource to find an insurer.
Altisource will probably get a one time fine settlement and they will go on doing business as usual. I believe this because an almost identical situation happened with Assurant and the New York State Financial Department and they settled for $14 million. There is also an interview on CNBC with someone who talks to the CEO of Ocwen and they are sure that Ocwen and Altisource will just settle with a deal with Lawsky and that will be the end of it.
Interview:
http://video.cnbc.com/gallery/?video=3000298804
Risks Benjamin Lawsky actually finds something else that Altisource was doing wrong. Bill Erbey Dies. He is in his 60s and overweight.
Conclusion
In conclusion Altisource is extremely cheap. Remember that quote about not knowing how much a man weighs but knowing he is fat? That is the case with Altisource. Altisource is definitely undervalued but there are a range of possibilities of the valuation with Hubzu, regulatory matters, growth, etc.
submitted by nomcow to SecurityAnalysis [link] [comments]

A few thoughts - Friday, July 11, 2014

Good afternoon! A few thoughts for lunch today:

Dark Wallet making waves

There's a cover story at Wired today about the Dark Wallet software that aims to completely anonymize transactions. Built on top of bitcoin, Dark Wallet merges transactions through a method known as CoinJoin, making it impossible to trace the destination of funds. The creators state that the goal of Dark Wallet is to make bitcoin transactions completely anonymous.
I like Dark Wallet because it is built on top of the bitcoin protocol. Darkcoin, an alternative system that aims to accomplish the same thing, is more centralized (it has masternodes). Darkcoin also suffers from the simple fact that it is an altcoin, which is reason enough to believe that it is unlikely to succeed.
Dark Wallet's success is more likely, because it theoretically could be used interchangably with the existing protocol. Since money flows over bitcoin and there are no colored coins representing larger values, a Dark Wallet coin is worth the same as a bitcoin. Should people start to use Dark Wallet, I predict that the Dark Wallet protocol becomes implemented by all major providers within a year of that. Should that happen, Dark Wallet will eventually become the default protocol, since traditional bitcoin has no advantages over Dark Wallet (who doesn't want to protect their privacy?) We could see it integrated into the reference client, just as the reference client uses new change addresses now to protect privacy. Ironically, the only use the non-Dark Wallet protocol would have then is for transparency purposes like proofs of reserve and huge bank transfers, so that straight bitcoin suddenly goes from the evil anonymous currency to the transparency enforcer.
Pay attention to Dark Wallet. Because it is not an altcoin, and because it is so interchangable with straight bitcoin, it could eventually become the standard protocol should people start using it.

The difference between good news and actual products

I wonder if some of the discrepency between actual prices and the amount of good news that seemingly appears is because much of the good news is not actually what it seems. I was surprised to discover this morning, for example, that 1-800-flowers isn't actually accepting bitcoins. They only announced that they will be doing so later in the year, which adds them to a string of companies which stated they would be accepting bitcoins but turned out that only a small segment of the business was doing so, or that these companies' bitcoin acceptance wasn't live yet.
It's also worth considering that many press releases have no real product behind them. Circle, which issued a release in mid-May, said that they were going to allow people to buy bitcoins with a credit card for no charge. Two months later, we have yet to hear a single person who has been accepted into their beta testing program.
Therefore, I propose that one reason that good news has little effect on the markets is that it isn't actually good news. Perhaps the big time investors who actually make a difference see through the press releases more easily than the people on reddit do.

Why go bearish so early?

Some people questioned why I would have a negative outlook on bitcoins several weeks before we can confirm that this bubble cycle failed to launch. After all, the expected time that this bubble would peak isn't close to arriving yet.
Over the past year, market movements have tended to occur about 10 days before the majority of people on reddit believed that they would happen. You can see this correlation in the crashes and rises last November pretty clearly. I've predicted that things aren't turning out the way many people believed, and that such an outcome would likely produce a downturn (but not kill bitcoins). Because things happen often happen before everyone believes they will, I would imagine that the fallout would occur before the expected timeframe of this bubble elapses.

On the New York regulations

Much has been made about how Benjamin Lawsky's proposed regulations will have a significant impact if they are released in a few weeks. I predict no impact at all.
First, any regulations that are released are not going to be final; they still need to be discussed and approved. Therefore, companies will not be able to act upon them without fear of the rules changing before they are finalized months from now. Second, these regulations were to have been completed several weeks ago, and are still outstanding. As people in /bitcoinmarkets say, it's always coming "in two weeks." Finally, even if these regulations were finalized two weeks from now, there aren't any companies ready to pounce on them. Other regulations like money transmitting licenses, and simply not having the software ready, are greater hindrances at this point to these companies.
Lawsky's regulations are important, but the timeframe in which they will have an effect is going to be drawn out well into the future. When they are finally approved, there probably wouldn't be much splash, since the splash always is made on the initial announcement. Their approval will set the stage for growth, but not until they are finalized and the companies are ready to go.

Litecoins are like bitcoins of the altcoin world

It occurred to me recently that people separate cryptocurrencies into two areas: bitcoins and everything else (altcoins). In some ways, altcoins can be separated into litecoins and everything else.
In these contexts, bitcoins and litecoins share many characteristics. Both were the first, and most widely used, in their fields. Both use proven algorithms and provide a barebones framework, rather than attempting to experiment with extra features like anonymity or using 6 algorithms. Both serve as a reserve currency against which other cryptocurrencies are measured. Both have established uses that people need to hold them for to conduct real commerce. And both can be traded directly for dollars.
This is why I do not believe that litecoins are going away. The idea of "silver and gold" is not a misdirection; the simple fact that litecoins are worth less than bitcoins has made them valuable in a number of instances where eight decimal places of bitcoins is not granular enough. Just as bitcoins' most important attribute is their network effect, litecoins have a smaller, but similar network effect. Convincing people to switch out litecoins for Darkcoins or whatever flavor of the day comes up next will be just as difficult as it would be to convince people to drop bitcoins in favor of some other currency.

Uses for the sockpuppet accounts

It's worth paying attention to flairs in /bitcoinmarkets for unusual activity. One thing those sockpuppet accounts could be used for is to influence the bulls-to-bears ratio. In yesterday's comment, I referred to the "weighted bulls to bears ratio," which is a better metric that minimizes the effects of such accounts.

Other

submitted by quintin3265 to BitcoinThoughts [link] [comments]

The email I sent reporters in Nebraska.

Subject: Nebraska Money Laundering with Bitcoin Hearing (LB691) on February 7th, 2018 at 1:30 at the Capitol
Dear Reporters,
In an hour (02/07/2018 at 1:30 CST) a Virtual Currency hearing will take place in the Judiciary Committee in Nebraska (links at the button.)
I was reading the news over what happened in the bitcoin word yesterday and while everyone wrote about the Virtual Currency bitcoin hearing that took place in the Banking Committee in DC, no one is reported epic Banking Committee hearing in Nebraska.
A Uniform Law Commission (or ULC) bill was introduced in Hawaii and Nebraska (the same language in both states) and the only difference between the hearings in both states is that in Nebraska the regular every day folks had the opportunity testify and educate the lawmakers on the technology and all the deficiency of the ULC bill. The opponents to the bill also welcomed the opportunity to present constructive alternatives.
The Uniform Law Commission is a body that membership is only composed of members of the bar. No one but a lawyer can be a member. This body although very distinguished is very undemocratic and very risk and technology adverse.
At the Banking hearing in Nebraska, the lawmakers listened to the presentation from the Nebraskan ULC commissioners and asked a basic questions such as how many ATM, how is the technology used which none of the ULC lawyers were able to answer.
The opponents included all of the Silicon Prairie bitcoin and Blockchain innovators, technologists, lawyers, students, ATM operators, users, veterans. This hearing was recorded on video but unfortunately the Clerk doesn t make it publicly available.
This presentation in Nebraska is a sharp contrast with the one in Hawaii (scheduled with 48 hours advance so no one was present to oppose the bill publicly) and only members of the Hawaiian ULC Comission were present to testify. This is the 21 minutes video: https://youtu.be/1UUIbeWwKLE.
The bill they oppose is a bill crafted for ULC by Wall Street trough CoinCenter, the Digital Blockchain and the Electronic Frontier Foundation.
The Bitcoin Foundation has been the leading organisation fighting the Uniform Law Commission on behaft of the bitcoiners all over the world.
Local Nebraskans bitcoiners stepped up and I am surprised that no one wrote about the incredible democratic display and incredible knowledge sharing that took place in Nebraska.
Personally, the DC hearing is a déjà vu of the sham hearings that were organised by Benjamin Lawsky in 2014 at the New York Department of Finance when Ben Lawsky before he introduced the Bitlicense that created the great New York Bitcoin Exodus. ICO are not to be feared. At the time, the people who claimed they represented the industry were celebrating the superintendent. Two years later he was solelly reponsible for the industry to be decimated in the State of New York.
At 1:30 central time, another hearing will take place at the Nebraska Legislature regarding the addition of Virtual Currencies into the Money Laundering statute. This is a replay of what happened in Florida where Law Enforcement rammed a similar bill trough the legislature in 9 minutes when a judge ruled that bitcoin was not money. (Video here: https://youtu.be/TbE1IGW_yd4)
I hope you will watch the Nebraska Judiciary Committee meeting today at 1:30 Central Time (2:30 Eastern Time) and report on how Nebraska following New Hampshire on how to include the citizenry in the decision process.
Hope you watch the hearing live and report on it.
The hearing will be streamed live here: http://netnebraska.org/interactive-multimedia/government/legislative-hearing-judiciary-committee-room-1113-39
You can find more information at the website designed by Nebraskan bitcoiners: https://nebraska.bitlicense.us
Regards,
Theo Chino @TheoBitcoin http://www.AbolishTheBitlicense.org
submitted by theochino to CryptoCurrency [link] [comments]

States put heat on Bitcoin. (WSJ - 6/26 - article cut & Paste for w/o Subscription)

By ROBIN SIDEL and ANDREW R. JOHNSON State regulators are warning virtual-currency exchanges and other companies that deal with bitcoin that they could be closed down if their activities run afoul of state money-transmission laws, according to people familiar with the matter.
According to people familiar with the situation, banking regulators in California, New York and Virginia in recent weeks have issued letters telling the companies that they need to follow the state rules or prove that the rules don't apply to them.
The warnings fall short of formal "cease and desist" orders, which would demand that the companies immediately stop engaging in their business, these people said.
Still, the moves show that state regulators have moved beyond merely scrutinizing virtual currencies and now are taking steps to prevent people and companies from using them for illegal activities. Federal regulators already are cracking down on virtual currencies.
Similar actions are expected from other states in coming weeks and months, according to people familiar with the matter. California, New York and Virginia are three of the 48 states that require the companies to obtain money-transmission licenses to operate. South Carolina and Montana don't have such rules.
The money-transmission rules vary among states, but most require detailed financial data, business strategy and information about the company's management. States also typically require companies to put up a bond that could run as high as several million dollars.
Bits and Pieces
Read about Bitcoin's evolution.
The actions aren't related to the announcement last week that Mt. Gox, the largest bitcoin trading exchange, has halted withdrawals of customer funds in U.S. dollars. The Tokyo company said it was making system improvements.
Unlike dollars or euros that are backed by a central bank, bitcoin users can create the units in a process called "mining." Users also can trade the currency on a number of exchanges or swap it privately.
The state actions come three months after federal regulators issued guidelines placing virtual-currency exchanges under the same comprehensive anti-money-laundering requirements as traditional money-transmission businesses such as Western Union Co. Since then, a handful of bitcoin exchanges have registered with the U.S. Treasury Department's Financial Crimes Enforcement Network.
The California Department of Financial Institutions has issued at least three warnings to bitcoin-related companies in recent weeks, according to people familiar with the actions. One of the recipients is the Bitcoin Foundation, an industry-backed group that promotes the digital cash.
Patrick Murck, general counsel for the Bitcoin Foundation, said it is a nonprofit organization and doesn't engage in money transmission. The group is formulating its response to the letter it received from regulators last week.
A spokeswoman for the California banking department declined to comment on the warning letters, saying the communications are confidential and "the goal is safety and soundness and compliance with the laws that DFI enforces."
California is particularly important to the bitcoin community because many of the startup companies that are tied to the virtual currency are based there. California and New York are known for having stricter money-transmission laws than other states.
Bloomberg News Bitcoin supporter Peter Vessenes
"Bitcoin businesses are spending a lot of time and energy figuring out how to stay out of California," said Peter Vessenes, chief executive of CoinLab, a Bainbridge Island, Wash., company that has registered as a money-services business with the Financial Crimes Enforcement Network. CoinLab is waiting to launch any exchange-related services until it gets its "state licensing strategy sorted," said Mr. Vessenes, who also is chairman of the Bitcoin Foundation.
The New York Department of Financial Services issued a similar letter to BitInstant, a New York company that allows customers to buy and sell bitcoins. The company earlier this month alerted customers on its website that it wasn't accepting cash deposits "as we make steps to transition to our new website."
Charlie Shrem, chief executive of BitInstant, couldn't be reached for comment. The company has registered as a money-services business with federal regulators.
"Virtual currency firms inhabit an evolving and sometimes murky corner of the financial world," Benjamin Lawsky, superintendent of New York's Department of Financial Services, said in an interview.
"The extent and nature of their operations morph constantly, so it's important for regulators to ask the hard questions and stay ahead of the curve in order to root out dangerous or illegal activity," he said.
In Virginia, a company called Tangible Cryptography suspended the purchase of the currency through its service called FastCash4Bitcoins after receiving a letter from state regulators who received a complaint that the company was operating as an unlicensed money transmitter, according to a notice on its website. Company representatives couldn't be reached for comment.
Tangible Cryptography said on its website that its activity is exempt from licensing requirements and that the commission's initial assessment contained factual errors.
"While we respond to the commission's notice, the prudent action is for the company to suspend all new transactions," the company said.
A spokesman for the Virginia Bureau of Financial Institutions declined to comment on whether it has issued similar notices to other companies.
Write to Robin Sidel at [email protected] and Andrew R. Johnson at [email protected]
A version of this article appeared June 26, 2013, on page C1 in the U.S. edition of The Wall Street Journal, with the headline: States Put Heat on Bitcoin.
submitted by siamesefightingfish to Bitcoin [link] [comments]

Ripple XRP is already regulated and has bitlicense approved by Ben Lawsky CKJ Crypto News New York Lawmakers Highlight Potential Ripple XRP. Ripple Receives New York’s First BitLicense Jeanine Prezioso interviews Benjamin Lawsky - Reuters video Bitcoin could be viable money alternative in 5 years -Lawsky BitLicense Proposal Update, Super Ben Lawsky In Da House

Benjamin Lawsky, the creator of BitLicense is topping finance headlines again. Ever since 2014, BitLicense has been a topic of controversy. Benjamin Lawsky is laying out a new policy on Bitcoin and other digital currencies after public comments encouraged him to scale back proposed rules. Benjamin Lawsky, New York's financial services superintendent, raised his idea for a "BitLicense" in a hearing a day after a prominent bitcoin entrepreneur was arrested on money laundering charges. Benjamin Lawsky, the former financial regulator who created New York’s BitLicense in 2015, joined New York Digital Investment Group Asset Advisory LLC (NYDIG) nearly a year before the bitcoin ... The Department of Financial Services superintendent, Benjamin Lawsky, who has been leading the charge in an effort to regulate bitcoin, is reportedly considering resigning from his position in early 2015. Benjamin Lawsky is perhaps the most powerful person in New York State to be pushing regulation on the bitcoin community. Many are curious as to […]

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Ripple XRP is already regulated and has bitlicense approved by Ben Lawsky CKJ Crypto News

BitLicense Proposal Update, Ben Lawsky In Da House tips: 1FEqW7sQrxqQbVtx3TpYMKYUuLU9CUEfmo Used to love the SNES, good times, favorite games: street fight 2 turbo ... 🔴 [LIVE] Bitcoin Halving 2020 news, Altcoin trading, Global Crisis? ... Benjamin Lawsky on Settlements, Cybersecurity and More - Duration: 15:37. City & State 162 views. 15:37. Ripple XRP is already regulated, and has bitlicense. Benjamin Lawsky, the former superintendent of financial services for New York State, is joining Ripple’s board of directors. Benjamin M. Lawsky is New York State's first Superintendent of Financial Services who called for Tuesday's special proceedings. ... News & Politics; Show more Show ... Bitcoin's Regulatory ... Ripple Welcomes New Board Member Benjamin Lawsky As Ripple’s newest board member, Lawsky will play an integral role in helping financial institutions adopt XRP for institutional use, which in ...

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