Bitcoin exchanges benefitting from key BitLicense exemption
The August 8 deadline for BitLicense saw many companies suspending their operations New York while others applied for the same. However, some of the companies are taking advantage from some key exclusion :
"The following Persons are exempt from the licensing requirements otherwise applicable under this Part: (1) Persons that are chartered under the New York Banking Law and are approved by the superintendent to engage in Virtual Currency Business Activity."- BitLicense.
itBit is the first ever bitcoin company to receive a trust company charter from the New York Department of Financial Services (NYDFS), allowing it to operate in all 50 states as a fully regulated entity and excluding it from regulation under the BitLicense altogether.
"Through a trust company charter, granted by the New York State Department of Financial Services (NYDFS), itBit has established the itBit Trust Company, organized under New York State banking law. This makes itBit the only U.S.-chartered and supervised bitcoin exchange able to offer unique protection and security for customers in full compliance with New York and federal law."- itBit.
The exchange has recently announced the launch of its own over-the-counter (OTC) trading desk that will deal in large transactions of more than 100 bitcoins (equal to $27,600 at present).
"Up until now, the OTC bitcoin trading market has been operating in parallel to existing exchanges. With the itBit Global OTC Agency Trading Desk, our customers will be able to access a regulated OTC market through their existing itBit exchange accounts, matching OTC buyers and sellers through itBit's global network of clients across more than 100 countries", said Bobby Cho, itBit director of trading.
The Winklevoss brothers have also filed to become a trust company with the NYDFS for their exchange Gemini.
"We are also thrilled to announce that we have secured a banking relationship with a New York State-chartered bank," the Winklevoss twins announced earlier this year in a blog post, adding, "Your money will never leave the country. It also means that US dollars on Gemini will be eligible for FDIC insurance and held by a US-regulated bank. Your US dollars on Gemini will be as safe and secure as they are in your bank account today".