The New York Digital Investment Group (NYDIG) has obtained regulatory approval for running cryptocurrency custody and trading operations in New York.
NYDIG Gets BitLicense
A BitLicense is a mandatory business license required by any firm which intends to deal in virtual currencies in the state of New York. The permit is issued by the New York State Department of Financial Services (NYSDFS).
The license needs to be obtained by any firm which is based in or is providing services to the residents of the state.
NYDIG Execution, a subsidiary of the New York Digital Investment Group LLC (NYDIG), became the 14th firm to obtain BitLicense from the regulator. The regulator has approved a virtual currency and a money transmission license.
Also, NYDIG Trust Company LLC, a subsidiary of NYDIG LLC, has been authorized to operate as a limited purpose trust company.
The development was announced by DFS earlier this week on its website.
The Scope of Services
The regulatory permission would enable NYDIG Execution to offer custody and trading services to its customers for a limited number of digital currencies, including Bitcoin, Bitcoin Cash, Ether, XRP and Litecoin.
DFS Superintendent Maria T. Vullo said:
As the financial services marketplace continues to expand and evolve in New York, the implementation of strong regulatory safeguards that encourage the responsible growth of the industry, while first and foremost protecting consumers remains critical.
Today’s approval further demonstrates that operating within New York’s robust state regulatory system leads to a stronger fintech marketplace and promotes innovation and necessary compliance with effective risk-based controls.
Robert Gutmann, CEO of New York Digital Investment Group, offered his thoughts on the matter:
NYDIG is pleased to receive these regulatory approvals, and we look forward to providing secure and transparent liquidity, custodial and asset management services to the institutional market. We want to express our gratitude to the NYDFS for providing a clear and comprehensive regulatory framework for investors, providers and users alike to engage with the burgeoning digital asset ecosystem.
Earlier in October, Coinbase was granted a license from DFS to provide custody services to residents of New York. Coinbase Custody has been permitted to offer services for Bitcoin, Bitcoin Cash, Ethereum, Ether Classic, Litecoin, and XRP.
Last month, Live Bitcoin News reported about IDEX, a decentralized cryptocurrency exchange, announcing that it would block all trades from New York IP addresses as the firm did not have the BitLicense to offer services in New York.
Do you think stringent regulations are good for investor protection? Let us know in the comments below.
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Author: Kuldeep Kaul