New York plans to introduce a regulatroy framework for Bitcoin following fears that virtual currencies are being used in criminal activities.
The New York State Department of Financial Services will be the first state in the US to "put in place guardrails for this industry to help root out money laundering and other misconduct".
The move comes days after the heads of Bitcoin exchanges BitInstant.com and BTCKing were arrested on money laundering charges.
Admitting regulators are in "new and unchartered waters" when dealing with virtual currencies, Benjamin Lawsky, superintendent of financial services, said: "Serious people – in the technological and investment community – are taking virtual currencies seriously. They are putting significant amounts of time, attention, and capital behind them. We, as a regulator, cannot turn a blind eye to something like that. We don’t really have a choice.
"Right now, the regulation of virtual currency industry is akin to a virtual Wild West. (There is even a modern day Gold Rush among miners in the virtual currency community.) That lack of regulation, however, is simply is not tenable for the long term."
