New York City Department of Financial services issues 14th BitLicense as Crypto-penetration increases on Wall Street

Dennis Wafula

November 15, 2018

The New York State Department of Financial Services yesterday announced that it had approved an application for the registration of a crypto exchanger. The application had been filed by a subsidiary of NYDIG LLC- NYDIG Execution LLC. The latter company has been granted licensing for the operation of a virtual currency and money transmission service. In addition, the company has allowed the setting up of a hedge fund by the same parent company under the auspices of a limited purpose trust company. The latter trust will be named NYDIG Trust Company.

Virtual currency exchange services

NYDIG Execution LLC now joins 14 other crypto-exchanges approved by the DFS to undertake virtual currency and money transmission services.

The news was broken by New York DFS’s Superintendent Vullo. Speaking to the press, the Superintendent stated that as the financial services markets continue to expand and evolve in New York, a corresponding robust framework has to be put up around the industry. According to him, the responsible growth of the industry will only be achieved if strong regulatory safeguards are put in place. The license comes with requirements from DFS that any licensee lays the groundwork such that consumers can; engage in self-custody or contract with a third party for custodial services.

Ensure safe custody of digital assets

The state Department’s authorization places duty on NYDIG to provide tamperproof safe keeping of digital assets, provision of consumers with a variety of options of custody for their digital tokens among others. In doing so, the DFS is in exercise of its mandate to rapidly respond to financial services market innovations through enabling the players to operate through such ways as licensing. This is done in accordance with the New York’s money transmitter law, the online lenders’ rules as per New York’s banking law and the virtual currency exchanges under New York’s financial services law.

The risks associated with cryptocurrency will also be greatly diminished if state laws can be used to set a regulated and tamperproof financial technology environment. Speaking on behalf of the New York’s Department of Financial Services, Superintendent Vullo stated that, “today’s approval further demonstrates that operating within New York’s robust state regulatory system leads to a stronger financial technology marketplace and promotes innovation and necessary compliance with effective risk-based controls.” CRYPTO IS COMING!