Bitstamp Granted BitLicense As Exchange Eyes U.S. Expansion
Bitstamp, amongst Europe’s top crypto exchanges, has just secured the New York virtual currency license and is reportedly eyeing an expansion phase that will see it roll out its services in the U.S. market.
The exchange secured the BitLicense from the New York Department of Financial Services (NYDFS) on Tuesday, becoming the 19th firm to get the state regulator’s approval.
The license allows the platform to provide its users trading services covering Bitcoin (BTC), Litecoin (LTC), bitcoin cash (BCH), Ethereum (ETH) and XRP.
Bitstamp reportedly applied to have its operations in the state for the first time in June 2015, the year when the NYDFS introduced New York State’s most prominent crypto-business license.
Coindesk has quoted the exchange’s CEO Nejc Kodrič, as saying that Bitstamp was among the first 22 applicants for the license.
Notably, the NYDFS only approved a handful of these applications in the first couple of years. The trend, however, appears to have picked pace in the last two years. Issuance for the virtual currency license has nearly tripled since the beginning of last year.
In 2019 alone, the regulator has issued the license to five businesses, with the underlying reason being that NYDFS wants to continue promoting innovation and growth.
The others that have received the regulator’s nod are prime brokerage Tagomi, zero-fee stock trading platform Robinhood, and bitcoin ATM companies Cottonwood Vending and LibertyX.
Kodrič noted that it took several discussions between it and the NYDFS regarding the exchange’s operations for them to reach the current position.
He explained that some of the questions the regulator wanted to be answered involved aspects of the exchange’s matching engine and how it works. They also revolved around how the Europe-based crypto exchange stored its users’ digital assets as well as its auditing procedures.
The Bitstamp chief also compared the NYDFS authorization process to the standards required for one to operate in the European market. He noted that the BitLicense is more or else similar to the financial services license it has.
According to him, the process is not that different and thus, they (Bitstamp) “didn’t reinvent the wheel.”At the moment, the exchange possesses a payments license that allows it to offer its services across all of E.U.’s 28 member states.
The company has had a “passive” presence in the U.S. but hopes to expand now that it has the virtual currency license.
Bitstamp was founded in 2011, a few years before the NYDFS introduced the BitLicense and thus already had operations within the U.S. although it does provide services to its users in the country; the plan is to become a lot more aggressive.
It all falls in line with ambitions to launch trading for more services beyond the five coins it is allowed to offer as per the license.
The U.K.-based exchange operates primarily as a crypto-to-fiat platform, with most of its trading volume generated via fiat on and off-ramps. However, it also provides crypto-to-crypto services as it looks to ramp up its global presence.
Bitstamp is one among ten crypto exchanges that asset manager Bitwise listed as having legitimate trading volume, ranking it in the fourth spot.
Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.