The New York State Senate has confirmed Linda Lacewell as new superintendent for the Department of Financial Services, the body responsible for regulating nearly 1,500 financial institutions with assets of more than $2.6 trillion and the cryptocurrency industry.
Lacewell was nominated for the position by Governor Andrew Cuomo and previously served as chief of staff for the Governor and acting superintendent for the DFS. She had been serving in the role as top the state’s financial regulator since February 2019.
Since 2015, the DFS has taken the lead nationally to regulate the virtual currency market. The agency’s central aims in regulating the industry are to prevent money laundering, protect consumers, and lay out rules related to cybersecurity. The department has approved 19 crypto companies since introducing BitLicense requirements in June 2015.
Under Lacewell’s leadership as acting superintendent the DFS has continued to expand the virtual currency market in NY by offering licenses for new entrants.
Most recently, Lacewell granted the application of Bitstamp USA, an Luxembourg-based exchange, to hang its shingle in New York.
“A regulated industry protects customers while supporting innovation and ensuring our financial services sector is a vibrant part of New York’s economy,” Lacewell said at the time. She suggested the expansion of the market encourages competition.
Additionally, the department has made moves to secure the trading of privacy-protecting cryptocurrency, when granting the Gemini exchange a BitLicense to offer trading in Zcash.
However, the regulator’s requirements are anything but lax. In April, Bittrex was denied a bit license for failing to comply with KYC rules and shirking its “obligation to conduct appropriate due diligence on all types of assets,” as Shirin Emami, executive deputy superintendent for banking at the DFS, said in an op-ed.
“It is an honor and a privilege to be confirmed as Superintendent of the Department of Financial Services,” Superintendent Lacewell said in a statement. “I thank Governor Cuomo and the Members of the New York State Senate for the opportunity to lead this essential agency and I look forward to working with the entire Legislature at a time when it has never been more important to protect consumers, safeguard markets, enforce the law and encourage real financial services innovation.”
Lacewell previously established the Cyber Division, which focuses on consumer protection and cybersecurity, and the Consumer Protection and Financial Enforcement Division, to fight consumer fraud as well as ensure compliance from regulated firms.
“Linda understands what good public policy is and intuitively knows that markets work best when there’s an even playing field with clear rules preventing fraud, abuse and unfairness,” said Benjamin Lawsky, the agency’s first superintendent, at the time she was first announced acting principle.
She is the recipient of the Henry L. Stimson Medal and the Attorney General’s Award for Exceptional Service.