Kevin Werbach is a Professor of Legal Studies & Business Ethics at the Wharton School at the University of Pennsylvania, and the author of "The Blockchain and the New Architecture of Trust," from which this article is adapted. _______
In 2015, New York became one of the first jurisdictions in the world to adopt a regulatory regime for cryptocurrencies. The Department of Financial Services began requiring virtual currency businesses to obtain a “BitLicense” in order to operate or serve customers in the state.
“We want to promote and support companies that use new, emerging technologies to build better financial companies,” said then-New York Superintendent of Financial Services Ben Lawsky, when announcing the rules. He continued:
“Regulators are not always going to get the balance precisely right…. But we need to begin somewhere.”Perhaps. Yet Lawsky picked the wrong somewhere. And he moved to fast to formalize rules governing what was still, in 2015, a small-scale and fluid cryptocurrency community.