Cryptocurrency exchange itBit is expected to become the first bitcoin firm in the US regulated as a bank, as the company has filed for a banking license in New York. According to people, familiar with the process, the license is likely to be approved in the following two weeks, Reuters reported.
The move is in line with the company’s plan to enlarge its business and broaden a range of services in the financial sector. In 2014, itBit moved its headquarters from Singapore to New York and appointed Erik Wilgenhof Plante, former Senior Compliance Manager at PayPal, as new chief compliance officer.
“Some highly publicized failures and potentially illegal activity have focused attention on virtual currencies and have highlighted the need for a sound regulatory framework for virtual currencies,” said itBit CEO Charles Cascarilla in a letter to New York’s state banking regulator last year.
New York state’s superintendent of financial services, Benjamin Lawsky, has always advocated for regulating companies using the digital currency and the blockchain technology.
The license application includes the names of prominent figures in the financial and political circles, including former Senator from New Jersey Bill Bradley, former Chairman of the Financial Accounting Standards Board Sheila Bair and former Financial Accounting Standards Board Chairman Robert Herz. The organizers are liable for establishing limited liability companies in the state of New York, although they don’t hold positions in these companies.
Besides, the list of organizers includes ItBit CEO Charles Cascarilla and the founder of Liberty City Ventures Emil Wood, who together with Cascarilla opened the investment company Cedar Hill Capital Partners.
Many in the financial industry still don’t perceive bitcoin and other cryptocurrencies in a serious way, considering it is used mainly by teenagers and gamblers. However, such giants as Goldman Sachs Group Inc and International Business Machines Corp are considering the idea of adopting the blockchain technology in the near future.
Moreover, the Bank of England and the U.S. Federal Reserve have also investigated the technology and huge cities like New York, London and Singapore position themselves as centers of digital currency.
Since the establishment of itBit in 2012, the company obtained $6.6 million of investments after two rounds of funding. The exchange is supported by such venture capitalists as RRE Ventures, Canaan Partners and Liberty City Ventures.
Spokesperson for itBit and New York’s department of financial services confirmed to Reuters the company had filed an application for a banking license, but declined to give further comment. Herz, Bair, Cascarilla and Woods did not provide any comments as well.