Winklevoss-Backed Company Issued Subpoena In Bitcoin Inquiry

Winklevoss-Backed Company Issued Subpoena Over Bitcoin

A top New York banking regulator has subpoenaed a company backed by Cameron and Tyler Winklevoss -- the two brothers who once claimed Mark Zuckerberg stole their idea to create Facebook -- as part of a larger look into the controversial Bitcoin industry, the Wall Street Journal reported Sunday.

All together, the New York Department of Financial Services issued subpoenas to some two dozen companies. Here's the entire report from Reuters:

New York's top banking regulator has issued subpoenas to several companies associated with Bitcoin as part of an inquiry into business practices of the virtual currency industry, the Wall Street Journal reported, citing people familiar with the matter.

The subpoenas issued by the New York Department of Financial Services (DFS) seek information on antimoney laundering programs, consumer protection measures and investment strategies among other topics, the Journal said.

Companies that received subpoenas include Coinbase Inc, BitInstant and Coinsetter, the newspaper said. (

Jaron Lukasiewicz, chief executive of Coinsetter, said in an email to the WSJ that the information request is "an opportunity for companies in our space to open up a much needed dialogue with regulators."

He added that the regulator will find that most companies are working to legitimize Bitcoin and "want to build bridges that help regulators understand and support these financial innovations."

The newspaper said Coinbase and BitInstant couldn't be reached for comment on Sunday.

Benjamin Lawsky, who heads the DFS, also plans on Monday to issue a memo expressing concern that virtual currency companies are not complying with the state's money transmission laws.

Lawsky's memo also will outline plans to set new guidelines aimed at virtual currencies, the paper said.

"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," Lawsky wrote in a draft of the memo reviewed by the WSJ.

None of the parties could immediately be reached for comment by Reuters outside of regular U.S. business hours.

Bitcoin, which has been embraced by a number of venture capitalists in Silicon Valley, exists through an open-source software program that any users with enough skill and computing power can access. It is not managed by a single company or government. Users can buy Bitcoins through exchanges that convert real money into the virtual currency.

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