NY investigates virtual money to stem criminal use

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August 13, 2013

ALBANY, N.Y. (AP) — New York is investigating the "Wild West" atmosphere of virtual currency such as Bitcoin to create new regulations against its use in crimes.

Financial Services Superintendent Benjamin Lawsky's inquiry is confirmed in a memo provided to The Associated Press on Monday.

Virtual currency is composed of digital bits and based on mathematical schemes that guard against counterfeiting. Bitcoin was started in 2009 as a currency free from government controls.

Like any money, virtual currency can be used for legal or illegitimate reasons. Lawsky's memo claims it has been used for narcotics, illegal guns and child pornography.

A state official says 22 subpoenas were issued last week. They seek records of anti-money laundering measures, consumer protections, and investment and promotional materials. The official spoke on the condition of anonymity because the investigation hasn't been announced yet.

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