Wednesday, April 10, 2019

Bitcoin Exchange Bitstamp Receives NY’s BitLicense After 3-Year Wait

Bitcoin Exchange Bitstamp Receives NY’s BitLicense After 3-Year Wait

The US subsidiary of Bitstamp, one of the largest cryptocurrency exchanges in Europe, has received BitLicense from the New York Department of Financial Services (NYDFS), which means that the exchange can now offer Bitcoin, Litecoin, Bitcoin Cash, Ethereum and XRP trading pairs to the state’s residents.

Acting Financial Services Superintendent Linda A. Lacewell pointed out that the NYDFS licensing regime aims at supervising and fostering virtual currency exchanges under New York’s financial services law. She said:

“We are pleased to welcome Bitstamp to New York’s growing virtual currency marketplace. A regulated industry protects customers while supporting innovation and ensuring our financial services sector is a vibrant part of New York’s economy.”

According to the press release, apart from offering the trade in cryptos, Bitstamp USA is also authorized to facilitate transfers of funds onto the Ripple Network, issuing Ripple Balances in USD, other virtual currencies, and select fiat currencies, including the Australian Dollar, British Pound, Euro, Swiss Franc, and Japanese Yen.

Bitstamp CEO Nejc Kodrič commented:

“We appreciate New York’s solid regulatory framework – the nation’s first – to protect consumers using cryptocurrencies and look forward to expanding our growing business in the state. Bitstamp has always embraced regulatory efforts that focus on transparency and accountability to help expand the industry and bridge the gap between the traditional financial and cryptocurrency worlds.”

He added:

“The BitLicense requires us to meet several stringent requirements when it comes to consumer protection, which is a challenge we fully embrace. It is further proof that trading at Bitstamp is subject to the same high standards followed by traditional financial institutions.”

19 Companies Have Been Approved By NYDFS

BitLicense is a business license granted for the activities involving virtual currencies. It contains a set of regulations that are issued by the NYSDFS. In order to regulate digital currencies, the framework of this regulation covers those that are located, reside, conduct or have a business place in New York.

Bitstamp, ranked the 47th largest exchange in the world in terms of adjusted daily traded volume, first applied for the license in June 2015, when NYDFS established a regulatory regime for cryptocurrencies. Bitstamp was among the first set of 22 applicants for the license.

To receive BitLicense, Bitstamp has undergone a robust examination into the company’s Anti-Money Laundering (AML) and Know Your Customer (KYC) compliance as well as the anti-fraud, capitalization and cybersecurity policies.

Nejc Kodrič said:

“There were questions all around how the matching engine works, how we store crypto, how we [conduct] audits. The license is a set of rules and procedures you have to follow on a daily basis, so once you do that you can [receive a BitLicense].”

Since 2015, NYDFS has approved the applications of 19 companies. In the first few years, the regulator only issued a couple of licenses and the first company that received it was Circle. In securing the license, Bitstamp joins other high-profile crypto industry firms such as Square, BitPay, Genesis Global Trading, BitFlyer USA, Coinbase, and others.

Bitstamp’s U.S. started handling operations before the BitLicense was finalized. Kodrič said:

“We were providing services in the [US] including New York before there were any licenses out there. We have many customers from the States, but we plan on going more active.”

Moreover, the exchange already has a payment institution license in the EU, that allows it to operate across all 28 member countries. Currently, Bitstamp is planning to expand its services in the USA, which is much easier with BitLicense.

Bitcoin Exchange Bitstamp Receives NY’s BitLicense After 3-Year Wait

Bitcoin Exchange Bitstamp Receives NY’s BitLicense After 3-Year Wait

Cryptocurrency is a digital currency that uses encryption (cryptography) to regulate the generation of currency and verify the transfer of funds, independently of a central bank. Cryptography is the practice and study of techniques for secure communication in the presence of third party adversaries.

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