New York State Department Of Financial Services Taps Enforcement Attorney To Lead Research And Innovation Division – About Your Online Magazine


Is the New York State Department of Finance (DFS) preparing for enforcement actions in the cryptographic space?

In the past few months, Debra Brookes he was discreetly installed in the newly created position of Deputy Head of Virtual Currency in the Research and Innovation Division at DFS. Prior to joining DFS more than eight years ago, Brookes was a federal prosecutor who led and participated in complex white-collar investigations that, according to his LinkedIn profile, resulted in more than 70 confessions of culprits from individuals and companies and millions of dollars in fines and restitution.

Prior to assuming his role in the Research and Innovation Division, Brookes held leadership positions in three different DFS divisions, each of which has supervisory and investigative authority: Financial Fraud and Consumer Protection Division, Enforcement Division and Protection Division Consumer and Financial Execution.

The DFS is the primary regulator of all banks licensed and licensed by the state, credit unions and bankers and mortgage brokers. The Department also oversees all money transmitters and virtual currency businesses operating in New York.

In 2015, DFS implemented the restrictive BitLicense, which made innovators in the FinTech space run out of the state. Since then, DFS has sought to attract them back with inviting rhetoric and innovative initiatives.

Last summer, the DFS enacted conditional BitLicense to allow virtual currency companies to do business in New York with fewer obstacles and less expense. Last October, PayPal

PYPL
became the first entity to receive conditional BitLicense.

At that time, DFS superintendent Linda A. Lacewell said that “DFS will continue to encourage and support financial service providers to operate, grow, stay and expand in New York and work with innovators to enable them to germinate and test their ideas, for a dynamic and forward-looking financial services sector. . . . “

At the time of this writing, the number of DFS-supervised crypto companies operating in the state has increased to 30.

Having a career execution regulator head of the DFS Research and Innovation Division suggests that the DFS may be looking for investigations into innovations. Maybe, but maybe not. After all, Valerie Szczepanik, who heads the Strategic Center for Innovation and Financial Technology at the Securities and Exchange Commission, has experience in law enforcement and has been an active and open participant in the cryptographic space, inviting companies to share their technology and vision, and offering guidance to ensure compliance.

So, the jury is decided on this one. Only time will tell. Fingers crossed.

Paula Fonseca