NY State Financial Regulator Grants Virtual Currency License To Bitstamp

NY State Financial Regulator Grants Virtual Currency License To Bitstamp

The New York State Department of Financial Services (DFS) has granted a virtual currency license to Bitstamp USA Inc., a subsidiary of Bitstamp Ltd., authorizing the company to offer crypto trading services in the state of New York.

The virtual currency license, also referred to as the BitLicense, allows Bitstamp USA to offer trading services in several cryptocurrencies including bitcoin, ether, litecoin and bitcoin cash, as well as the US dollar. Bitstamp USA is also authorized to facilitate transfers of funds onto the Ripple Network, issuing Ripple Balances in US dollar, other cryptocurrencies, and select fiat currencies, including the Australian dollar, British pound, the euro, the Swiss franc, and the Japanese yen.

Bitstamp said the news was an important step in the company’s effort to expand its presence in the US and showcase its commitment to being compliant with international regulations.

In 2016, Bitstamp Europe S.A., the group’s Luxembourg subsidiary, was granted a license to be fully regulated in the European Union (EU) as a payment institution, allowing it to do business in all 28 EU member states.

“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,” said Nejc Kodrič, CEO of Bitstamp.

“We’ve always embraced proactive efforts that protect the interests of both consumers and institutional investors. Obtaining a BitLicense is another example of our commitment to be the most trusted digital currency exchange in the world.”

Kodrič added:

“Having a BitLicense is also a key element in ramping up our presence in the United States, especially when it comes to working with institutional investors.”

The New York State DFS BitLicense required Bitstamp to meet several stringent requirements and submit documents including audited financial statements, the company’s most recent anti-money laundering (AML)/bank secrecy act (BSA) policy, a risk assessment, a business plan, the company’s staffing and internal policies including those addressing market manipulation, consumer protection and cybersecurity, and submitting a description of each type of transaction or service to be conducted.

Since the BitLicense came into effect in August 2015, the New York State DFS has approved applications of 19 companies including Circle, itBit, now Paxos Trust Company, Gemini, Ripple, Coinbase, bitFlyer, Xapo, Coinsource, and Robinhood Crypto LLC, a subsidiary of Robinhood Markets Inc., the operator of the popular commission free stock trading app Robinhood.

Founded in 2011, Bitstamp is one of the oldest cryptocurrency exchange platforms. The company claims to be the EU’s largest by trading volume, serving more than three million traders around the world.

Bitstamp was acquired in late 2018 by NXMH, a Belgium-based investment company. Both Bitstamp and NXMH declined to disclose the terms of the deal but rumors suggest it was around US$400 million.

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