Including the charter granted to BitGo NY, to date DFS has approved 28 charters and licenses for companies engaged in virtual currency business activity.
Bitcoin went past the previous all-time highs in the $20,000 area and jumped to nearly $60,000 in the last months. The trading industry has been gradually adopting, experimenting, and launching products related to the digital asset class.
The regulatory environment, however, remains somewhat unclear. Cryptocurrencies are legal and can be regulated, but the rhetoric from financial watchdogs is sometimes unexpectedly harsh.
New York Attorney General Letitia James is a leading hawk against cryptocurrency trading firms who provide unregistered services or don’t fail to comply with other rules. The NY AG office has recently fined and banned Coinseed, Bitfinex, and Tether, from operating in the state.
While regulatory enforcement in New York is taking place in an assertive manner, the state continues to provide new licenses to firms operating within the crypto space.
BitGo has now obtained a charter under New York Banking Law to operate as a limited liability trust company. The DFS approval authorizes the firm to provide digital asset custody and other related services to New York customers, including DFS supervised entities authorized to engage in virtual currency activity.
“New York’s dynamic and fast-moving crypto industry continues to mature and grow. The approval of this new charter is another step towards helping New Yorkers meet their need for digital asset custodial and related services and will promote the continued growth of the virtual currency industry in the State, helping diversify and innovate New York’s economy at a time when we are working to rebuild and recover New York’s economy”, said Superintendent Linda A. Lacewell.
Mike Belshe, CEO, BitGo. said: “We are extremely proud to receive the approval for a trust charter from NYDFS to serve the world’s premier financial organizations that are based in New York State- The past year has been exceptional for BitGo and the digital asset markets overall, primarily due to the influx of large financial services institutions that bring a new level of credibility, liquidity, and stability to the crypto ecosystem.”
The first New York crypto license was issued in 2015. The authorities have updated their approach to the dynamic crypto space, including streamlining the process for companies to adopt new coins through a self-certification framework and a coins Greenlist.
“You Either Play by The Rules or We Will Shut You Down”
New York Attorney General Letitia James has warned New Yorkers of the “extreme risk” posed by cryptocurrencies and urged “extreme caution when investing in virtual currencies”.
An additional alert was issued toward industry members, reminding brokers, dealers, salespersons, and investment advisors that they could potentially face “both civil and criminal liability” if they do not fulfill their obligations regarding registration with the state of New York when doing business with virtual currencies.
Attorney General James said the AG office is leveling the playing field and issuing alerts to both investors and industry members across the nation.
“We will not hesitate to take action against anyone who violates the law. Two weeks ago, we filed a lawsuit to shut down Coinseed’s fraudulent operation. Last week, we ended both Bitfinex and Tether’s illegal activities in New York. And now, today, we’re sending a clear message to the entire industry that you either play by the rules or we will shut you down”, AG Letitia James stated.