The New York State Department of Financial Services (DFS) has issued a new BitLicense to the New York Digital Investment Group (NYDIG), allowing it to offer crypto-related services in the state, according to an official DFS announcement published on November 14, 2018.
Digital Investment Group Acquires New York BitLicense
The New York State Department of Financial Services (DFS) has granted its 14th BitLicense, approving the application of New York Digital Investment Group (NYDIG) to offer crypto-related services in the state.
According to an official DFS announcement from November 14, the state authority said that NYDIG was now allowed to provide secure custody and trade execution services. NYDIG will also be able to operate as a custodian for virtual currencies such as Bitcoin, Bitcoin Cash, Ethereum, XRP, and Litecoin. Additionally, NYDIG Trust Company, a subsidiary of NYDIG, has been authorized to operate as a limited purpose trust company.
NYDIG CEO Robert Gutmann said:
“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.”
According to the statement, NYDIG is authorized to run self-custody contracting with third parties for custodial services, as well as to carry out contracting with NYDIG Execution or its other subsidiary NYDIG Trust.
New York’s Response to a Growing Crypto Industry
The state regulator created the BitLicense in 2015 as a special permit applying to virtual currency exchanges. To date, the department has granted licenses to 14 companies, among them bitFlyer, Coinbase, XRP II, and Circle. At the beginning of November, it approved the application of Bitcoin ATM network operator Coinsource.
And while it initially took well over a year for companies to obtain the DFS license, the process has now become significantly faster. The license has been granted to 9 companies in 2018 alone – a clear sign of the regulator’s fast response to the market demands.
Financial Services Superintendent Maria Vullo said that the implementation of strong regulatory safeguards would encourage the responsible growth of the industry and ensure the protection of customers.
In its statement, DFS said that it would continue to respond to financial services market innovations by licensing technology-based companies under New York’s laws. Vullo added that NYDIG’s license is a clear example of how operating within New York’s robust state regulatory system leads to a stronger fintech marketplace and promotes innovation.
However, not everyone is excited about the prospect of more regulation entering the crypto industry. The BitLicense has drawn criticism from crypto entities for being too burdensome, having forced industry giants such as ShapeShift and Kraken away from New York.