Business

Dennis Wafula

NYDIG Execution picks up New York’s BitLicense

The New York State Department of Financial Services (DFS) has approved New York Digital Investment Group (NYDIG) Execution LLC, a subsidiary of NYDIG LLC, for a virtual currency license and a money transmission license. The virtual currency license, also known as BitLicense, is required by any party looking to engage in any virtual currency-related business activity in the state.

According to the announcement, the license will allow NYDIG Execution to offer secure custody and trade execution services. It will also enable the company to operate as a custodian for virtual currencies such as Bitcoin BCH, as well as BTC, ETH, XRP, and LTC.

Financial Services Superintendent Maria T. Vullo said the approval strengthens the fintech marketplace in New York. She added that having regulation for the crypto space would ensure growth for the market, increase innovation and fewer risks for participants.

The BitLicense regulations have received mixed reactions from operators since August 2015. Some companies embrace the laws while others left New York to look for a more accommodating environment. Business exited the state in what was termed as “the Great Bitcoin Exodus,” citing harsh regulations, excessive disclosure requirements, and financial disincentives.

In a statement, NYDIG CEO Robert Guttmann said the company looks forward “to providing secure and transparent liquidity, asset management and custodial services to the institutional market.”

DFS has continued to regulate the financial market by licensing technology-based money transmitters under New York’s money transmitter law. The authority has also monitored online lenders under New York’s banking law and virtual currency exchanges under New York’s financial services law. So far, DFS has approved fourteen charters or licenses for companies in the virtual currency marketplace.

In 2018, more licenses have been granted to business in the crypto space. This year alone, nine licenses have been awarded. The seventh one was recently awarded to ATM operator Coinsource only two weeks ago. NYDIG’s license comes eight months after a proposed alternative to BitLicense regulations was brought before the New York State Assembly.

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