Benjamin Lawsky, the former New York state financial services chief, certainly wasn’t a fan of bitcoin or virtual currencies. But now, he seems to be warming up to the technology underpinning it — blockchain.
Lawsky is known for his outspoken views and push toward regulating the digital currency industry heavily. But the consultancy firm for which he serves as an adviser has just picked up a new client: a blockchain tech firm. The Lawsky Group works with its clients on financial regulation issues.
That firm that it’s reportedly working with is called Axoni, which uses its settlement process for derivatives transactions. Ironically, critics of Lawsky have spoken about how his resistance delayed the development of virtual currencies. But Lawsky said that he wanted regulation to be put in place in order to curb illegal activity without harming innovation.
Now, it appears he is going to use his firm to assist with the side of bitcoin that’s been getting more positive press.
“We’ll be doing a broad range of financial consultancy … and some financial technology public relations,” Lawsky Group spokesman Matthew Anderson told Fortune.
But, as one could imagine, having this former regulator anywhere near anything that resembles a digital currency caught some flack in the industry. In remarks shared by Fortune, Pamela Morgan, CEO of Third Key Solutions, said his involvement in a digital currency firm is “crony capitalism at its finest.”
She also said it speaks to the “cozy relationship between regulators and the regulated industry.”
But not everyone feels that way.
“I think it is fantastic that he has entered the private sector and continued to support the bitcoin/blockchain space,” said Adam Draper, CEO of Boost VC, a blockchain-focused venture capital firm.
So, has this former regulator come around to digital currencies? Hard to say, but he seems open to the possibilities of what the tech behind it can do. He’s certainly not alone in that regard.
The Trump-Bitcoin Wall Battle
Follow the bouncing bitcoin.
Trump infamously made a number of remarks about how he plans to pay for the wall that he says Mexico will be forced to build along the U.S. border if he is elected president. To pay for that wall, Trump says that he will block remittance transfers to Mexico. The bitcoin community now seems to be worried that would have a chilling impact on bitcoin adoption. In response, a number of billboards have been found plastered all over California to remind voters about Trump’s stance.
Bitcoin mining company Genesis Mining was one of them. It took out ads against Donald Trump.
The billboard reads: “Your Wall Won’t Stop Bitcoin, Mr. Trump!”
The mining group has furthered its campaign by sharing the following remarks about the election and bitcoin in general: “Bitcoin can’t be stopped. Not by Trump. Not by Putin. Not by anyone. Sure, you can pass regulations to make it more difficult to use, but at the end of the day, if people need it, they will always find a way.”
Viva la bitcoin? We’ll have to wait and see.
Data Breach Shutters Bitcoin Wallet
Another digital currency wallet bites the dust.
At least, that’s what happened after CoinWallet.co was breached. The company announced that it can’t keep up with the rising number of cyberattacks and is shutting down as a result. The company said it suffered a data breach earlier this month.
“Despite our best efforts, there was a small error in a part of our code that should have checked and sanitized user input on a recently added function. Checks were in place, but the check was then subsequently not used to block the database call. Our backup security system kicked in, as it was designed to, and no coins were lost. We have since patched the vulnerability but are still trying to determine the extent of the breach. We used encrypted and salted passwords, but given enough time, these should be assumed compromised,” the CoinWallet team explained in a post.
A Wad Of Benjamins — In Bitcoin?
Out of all the odd things to promote and encourage bitcoin, this one might be among the oddest.
A group of bitcoin enthusiasts have taken $100 bills and turned them into paper bitcoin collectible items. Why? Pretty much just because they felt like it. They’re also reportedly trying to sell them online in glass cases.
But the question remains about legal consequences: Are there any? Regulations related to paper currencies state: “Whoever mutilates, cuts, defaces, disfigures, or perforates, or unites or cements together, or does any other thing to any bank bill, draft, note or other evidence of debt issued by any national banking association, or Federal Reserve Bank, or the Federal Reserve System, with intent to render such bank bill, draft, note or other evidence of debt unfit to be reissued, shall be fined under this title or imprisoned not more than six months, or both.”
And that odd story about wraps up bitcoin’s ever-interesting week of wacky news.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More