NYDIG Awarded BitLicense To Offer Crypto Trading And Custodial Services In New York
The New York State Department of Financial Services (DFS) recently issued a new BitLicense to the New York Digital Investment Group (NYDIG), a move that allows the investment company to operate as a licensed virtual currency business.
With the BitLicense, NYDIG will now be able to offer a host of crypto-related services to a growing number of users in the state of New York.
As per its press release, DFS also approved NYDIG’s application for a license to operate a money transmitter, which combined with the other permit, allows the investment group to provide asset management services to its users in the state.
Moreover, DFS granted NYDIG LLC’s subsidiary NYDIG Trust Company authorization to operate as a limited purpose trust company.
This means that NYDIG can now proceed to offer a variety of custody and trade execution services, including custodial services for leading cryptocurrencies like Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Ripple (XRP) and Litecoin (LTC).
NYDIG CEO Robert Gutmann expressed the company’s excitement at receiving the BitLicense, saying that:
“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.”
As a custodial service, NYDIG could offer self-custody, contract a third party for the service, or work with its subsidiaries NYDIG Trust and NYDIG Execution.
New York’s growing marketplace
The DFS fashioned its BitLicense requirement in 2015, specifically designed to regulate the cryptocurrency exchange industry.
Initially criticized for being arduous and likely the result many businesses moved away from New York, the state has so far issued BitLicenses to 14 crypto related companies.
To date, DFS has issued the license to companies operating as payments startups, digital currency exchanges, and even an ATM vendor.
Some of the top companies to secure the license include bitFlyer, top U.S exchange Coinbase, and XRP II. Others with the DFS seal of approval are payments technology giant Circle, and most recently Bitcoin ATM operator Coinsource.
According to Financial Services Superintendent Maria Vullo, New York has continued to expand and evolve as a financial services marketplace.
It means that state regulators need to apply strong regulatory safeguards, to not only encourage further growth but also to ensure continued protection of consumers.
The DFS, in its announcement, revealed that its mandate included ensuring that it encouraged growth in the state’s financial services market by issuing licenses to innovative technology-based companies firms.
Vullo also noted that the NYDIG approval is a further demonstration of how New York’s robust regulatory system has seen it develop into a stronger fintech marketplace that promotes innovation.
While this is one more crypto company that has regulatory approval to operate in the Empire State, a general lack of clarity still blights the wider cryptocurrency industry. This even as SEC tightens its scrutiny over decentralized platforms.
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.