Make us your home page
Instagram

N.Y. investigates virtual money to stem criminal use

ALBANY, N.Y. — New York is trying to corral the "Wild West" atmosphere of virtual currencies such as Bitcoin and may create new regulations to keep the growing technology from being used in crimes.

Financial Services superintendent Benjamin Lawsky's inquiry was confirmed in a memo provided Monday to the Associated Press.

"We have seen instances where the cloak of anonymity provided by virtual currencies has helped support dangerous criminal activity, such as drug smuggling, money laundering, gun running and child pornography," Lawsky wrote in the memo. He said virtual money could threaten national security.

The memo cites a wide range of companies and investors who received subpoenas for documents and data that Lawsky said will help better understand the burgeoning industry. Among the investors on the list are Google Ventures and another company called Winklevoss Capital Management, with "key personnel" listed as Tyler and Cameron Winklevoss — the twins who sued Mark Zuckerberg in 2004 claiming he stole the idea for Facebook from a company founded by the Winklevosses and a third person from Harvard.

Lawsky said the investigation could lead to regulations that would also benefit virtual currency, which he called an innovative product and a legitimate business enterprise.

Virtual currency is composed of digital bits and based on mathematical schemes that guard against counterfeiting. Bitcoin was started in 2009 as a currency free from government controls, an entirely digital means of exchange for a digital age. It's a rapidly growing phenomenon that has taken root as a payment method on some websites for both legal and illegal goods.

A New York official said 22 subpoenas were issued last week seeking records of antimoney-laundering measures, consumer protections, and investment and promotional materials. The official asked not to be named by the Associated Press because the inquiry hasn't been announced.

Lawsky said his department is considering whether it should issue new regulatory guidelines, rather than try to adjust current laws on legal tender to include the new technology.

Lawsky said he plans to meet with members of the virtual currency industry before new regulations are created to protect consumers and national security.

N.Y. investigates virtual money to stem criminal use 08/12/13 [Last modified: Monday, August 12, 2013 10:08pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Associated Press.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. 'Road to Nowhere' is back: Next phase of Suncoast Parkway coming

    Roads

    Despite intense public opposition and dubious traffic projections, the Florida Department of Transportation has announced that construction of the toll road known as "Suncoast 2" is expected to start in early 2018.

    The Suncoast Parkway ends at U.S. 98 just south of Citrus County. For years residents have opposed extending the toll road, a project dubbed the "Suncoast 2" into Citrus County. But state officials recently announced that the Suncoast 2 should start construction in early 2018. [Stephen J. Coddington  |  TIMES]
  2. A sports rout on Wall Street

    Retail

    NEW YORK — Sporting goods retailers can't shake their losing streak.

  3. Grocery chain Aldi hosting hiring event in Brandon Aug. 24

    Retail

    BRANDON — German grocery chain Aldi is holding a hiring event for its Brandon store Aug. 24. It is looking to fill store associate, shift manager and manager trainee positions.

  4. Lightning owner Jeff Vinik backs film company pursuing global blockbusters

    Corporate

    TAMPA — Jeff Vinik's latest investment might be coming to a theater near you.

    Jeff Vinik, Tampa Bay Lightning owner, invested in a new movie company looking to appeal to a global audience. | [Times file photo]
  5. Trigaux: Look to new Inc. 5000 rankings for Tampa Bay's future heavyweights

    Business

    There's a whole lotta fast-growing private companies here in Tampa Bay. Odds are good you have not heard of most of them.

    Yet.

    Kyle Taylor, CEO and founder of The Penny Hoarder, fills a glass for his employees this past Wednesday as the young St. Petersburg personal advice business celebrates its landing at No. 25 on the 2017 Inc. 5000 list of the fastest growing private companies in the country. Taylor, still in his 20s, wins kudos from executive editor Alexis Grant for keeping the firm's culture innovative. The business ranked No. 32 last year. [DIRK SHADD   |   Times]