Former New York state financial services chief Benjamin Lawsky may have taken a harsh view of virtual currency as a regulator, but he has begun to stump for the technology behind it.
The man accused of implementing tough regulations on Bitcoins and other online currency now heads a consultancy that is acting as an adviser and media liaison for one of the sector’s major new players.
The Lawsky Group, which provides legal and strategic counsel for clients on financial regulation issues, was the press contact last week for Axoni, a blockchain technology firm.
Axoni was promoting its successful test of blockchain technology into the back office settlement process for derivatives transactions.
“We’ll be doing a broad range of financial consultancy … and some financial technology public relations,” said Lawsky Group spokesman Matthew Anderson.
Anderson was spokesman for the Department of Financial Services, the state regulator where Lawsky was accused of slowing the development of virtual currencies.
Lawsky said last June he wanted to “put in place guard rails that protect consumers and root out illicit activity without stifling beneficial innovation”.
Though some Bitcoin proponents welcomed the safeguards, Lawsky’s about-face now that he is profiting from the technology in the private sector has miffed more than a few observers.
“I think the most interesting thing about Mr Lawsky’s newest venture is that it highlights the cozy relationship between regulators and the regulated industry,” Pamela Morgan, CEO of Third Key Solutions, told IFR.
Morgan, whose company consults for other companies that use digital currencies such as Bitcoin, called Lawsky’s new role “crony capitalism at its finest”.
Lawsky’s spokesman did not respond to two requests for further detail about his work, though others saw no problem with it.
“I think it is fantastic that he has entered the private sector and continued to support the Bitcoin/blockchain space,” said Adam Draper, CEO of Boost VC, a venture capital firm focused on blockchain and other virtual technologies.
Some suggest the addition of public relations brings out a strength that helped raise Lawsky’s profile in the first place – his ability to interact with the media.