While the controversial BitLicense is about to be finalized later this month by the New York Department of Financial Services, itBit has become the first ever company to receive the charter. With this development, itBit is currently the only Bitcoin business that is compliant with both the Federal and New York State laws in the United States.
The company, which was in the news recently after it applied for the New York BitLicense has also raised an investment of $25 million in series A round earlier this year. With the approval from NY Department of Financial Services, itBit is now recognized as a chartered limited purpose trust company. With the newly granted fiduciary powers under the state’s banking law, the company can immediately start its operations as a financial institution, on par with any bank.
Founded in 2012, itBit is a Bitcoin exchange that operates out of Singapore and New York. According to Charles Cascarilla — the co-founder of itBit, the company took more than a year going through a thousand page application to apply for the BitLicense. As part of the approval process, the company’s AML, capitalization, consumer protection and digital security standards were thoroughly reviewed by the NY Department of Financial Services.
The company’s services are now available for all retail and institutional Bitcoin traders across the United States. ItBit, in partnership with US FDIC insured banking institution also insures all fiat balance belonging to the US customers on their platform.
It is being debates that the State of New York has unfairly set very high requirements of standards for the Bitcoin businesses to be eligible for BitLicense. It is being seen as a stumbling block which will harm the Bitcoin industry. The regulations set by NY Department of Financial Services for BitLicense are far more stringent than that of conventional banking licenses, which is deemed unnecessary and illogical.
Majority of Bitcoin companies across the world have already started following AML and KYC practices which is on par with that of the banking sector. BitLicense is seen as an attempt by the government to exert control over the Bitcoin economy.