Technology

Bitcoin Companies Subpoenaed Over Regulatory Concerns

Bitcoin Companies Subpoenaed Over Regulatory Concerns
Image credit: AP
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Editor-at-Large
2 min read
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New York state financial regulators have issued subpoenas asking Bitcoin-related companies for information into whether safeguards are in place to prevent the virtual currency from being used in illegal activities such as money laundering.

The Wall Street Journal, citing people familiar with the matter, said the New York Department of Financial Services also wants information on whether the companies have consumer-protection measures in place, in addition to investment strategies for Bitcoin.

Leading companies Coinbase Inc, BitInstant and Coinsetter are among the companies receiving subpoenas, according to the Journal. New York regulators also sent subpoenas to companies backed by high-profile Bitcoin investors, including venture capitalist Marc Andreessen, and Cameron and Tyler Winklevoss, the Journal said.

The Journal says the subpoenas come as New York plans to issue a memo raising questions over whether Bitcoin companies are following state law. The memo and subpoenas also suggest Bitcoin companies will be subject to a host of new rules and regulations, which, up to now, they have avoided.

"We believe that -- for a number of reasons -- putting in place appropriate regulatory safeguards for virtual currencies will be beneficial to the long term strength of the virtual currency industry," Benjamin Lawsky, New York's superintendent for financial services, wrote in a draft memo reviewed by the Journal.
 

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