New York Department of Financial Services (DFS) announced authorizing a BitLicense to the New York Digital Investment Group (NYDIG). It allows for “secure custody and trade execution services providing consumers with several options for the custody of the digital assets: engaging in self-custody, contracting with a third party for custodial services, or contracting with NYDIG Execution or NYDIG Trust for custody services. DFS authorized NYDIG to offer defined services to operate as a custodian for virtual currencies, including Bitcoin, Bitcoin Cash, Ether, XRP and Litecoin.”
DFS Grants BitLicense to NYDIG
On 14 November 2018, the state of New York granted license to NYDIG, enabling the firm to be a “virtual currency and money transmitter,” along with forming a NYDIG Trust Company LLC.
DFS Superintendent Maria Vullo explained, “As the financial services marketplace continues to expand and evolve in New York, the implementation of strong regulatory safeguards that encourage the responsible growth of the industry, while first and foremost protecting consumers remains critical. Today’s approval further demonstrates that operating within New York’s robust state regulatory system leads to a stronger fintech marketplace and promotes innovation and necessary compliance with effective risk-based controls.” The agency has now approved more than a dozen such requests.
“NYDIG is pleased to receive these regulatory approvals and we look forward to providing secure and transparent liquidity, custodial and asset management services to the institutional market,” Robert Gutmann, CEO of New York Digital Investment Group noted. “We want to express our gratitude to the NYDFS for providing a clear and comprehensive regulatory framework for investors, providers and users alike to engage with the burgeoning digital asset ecosystem.”
A Year of Licensing
The NYDFS has long been accused of thwarting crypto innovation within the Empire state, and its colloquially named BitLicense has been exhibit A as to the root cause. Notoriously, the requirements placed on early ecosystem businesses in the region pushed a number to relocate, having to start over in a new state.
Being in New York has several advantages for crypto-finance related firms, especially those wooing institutional investors who often desire custody arrangements. This year, however, the coveted crypto hall pass was given out to companies such as Circle, which appears to be looking to establish itself in all 50 states. And more recently, Genesis and Square were also issued work permits.
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