The first bitcoin exchange was authorized by the New York State Department of Financial Services (NYDFS) on Thursday. ItBit finally got its charter and status of banklike company after almost a year of attempts to create a procedure of virtual currencies control.
The process wasn’t easy and quite expensive but management of the company expresses confidence that it will pay for itself as their activity is intended first of all for large investors and financial organizations.
ItBit filed an application in February. NYDFS had inspected customer protection, anti-money laundering and information security before it approved the statement.
This victory is becoming even more significant in light of recent events when Ripple Labs was found guilty for acting as money service business without legal permission and had to pay the penalty in amount of $700,000.
ItBit has already started providing services for customers in the USA and Singapore. Its representatives admit that it’s actually a great step forward in development of digital currency industry. Charles Cascarilla, CEO of itBit, confirms: “This is a big deal, not just for us, but for the entire Bitcoin industry”. The company stands “creation of next-generation bitcoin products and services by combining Silicon Valley innovation with Wall Street expertise” as its aim.
Team of several people with great working experience at world leading enterprises founded itBit three years ago and since that time a number of brilliant experts have joined including Sheila Bair, former chair of the Federal Deposit Insurance Corp., and Bill Bradley, former New Jersey Senator. Cascarilla underlines the importance of strong management saying that “one of the most necessary things was bringing on a credible board”.
Current licensed activity of the exchange means obvious benefits for customers. Now they get full asset protection. Being a trust company enables itBit to act as a keeper of investors’ funds with no need to cooperate with banks to open accounts.
Bitcoin is still considered to be quite risky investment although significant steps have been made recently to establish its position in world’s financial sector. The most important events include start of bitcoin shares trading, launch of BitGold platform and Bitcoin Tracker One, the globe’s first security based on digital currency.
NYDFS believes that getting a license by itBit is only the beginning of coming digital currency agencies to the fore. Bitcoin has great prospects but needs to become more regulated. Benjamin Lawsky made a statement underlining necessity of control: “The technology behind bitcoin and other virtual currencies could ultimately hold real promise, and it is critical that we set up appropriate rules of the road to help safeguard customer funds”.