Bitcoin Companies Subpoenaed Over Regulatory Concerns 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.

By Ray Hennessey

Opinions expressed by Entrepreneur contributors are their own.

AP

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.

Ray Hennessey

Former Editorial Director at Entrepreneur Media

Ray Hennessey is the former editorial director of Entrepreneur.

Editor's Pick

Related Topics

Business News

People Are Eager to Go to Europe. But a 'Strange and Humiliating' Requirement Is Derailing Travel Plans.

There aren't enough resources to keep up with the demand — and it's causing major problems.

Business News

Tech CEO, 26, Found Dead in Suspected Murder

Pava LaPere founded EcoMap Technologies in December 2018.

Business News

Target Will Close 9 Stores Across 4 States Due to Ongoing Crime That's 'Threatening the Safety' of Customers and Employees

Target stated that it "invested heavily" in efforts to combat crime, but it just didn't work.

Business News

8 People Hospitalized on JetBlue Flight Headed to Florida Due to Turbulence

The turbulent conditions occurred near Jamaica on a flight coming from Ecuador.

Growing a Business

How to Navigate Ethical Considerations In Your Decision-Making

Business decisions often involve weighing ethics against profits. Find ways with a few tips to prioritize ethics and build trust with employees and customers.

Growing a Business

Innovation or Extinction — Why Complacency Is the Real Business Killer (and How to Foster an Innovative Culture)

Here are 10 ways to foster innovation in your company and why it's critical for your business's survival.