2 Fintech Firms Receive Stamp of Approval From NYDFS
“These approvals demonstrate DFS's commitment to protecting consumers and the virtual currency market while encouraging innovation, such as the expanded use of blockchain, and providing strong regulatory oversight to new and existing market participants,” said Maria Vullo, superintendent of the NYDFS.
May 17, 2018 at 04:40 PM
3 minute read
Maria Vullo. Courtesy photo.
New York Department of Financial Services Superintendent Maria Vullo announced Thursday Paxos Trust Co. is now authorized to offer a blockchain-based precious metals platform, and Genesis Global Trading Inc.'s application for a virtual currency license was approved.
Both fintechs are among the first few recipients of the approvals they received.
“New York continues to lead the nation in regulating the growing fintech industry,” Vullo said in a press release.
She continued, “These approvals demonstrate DFS's commitment to protecting consumers and the virtual currency market while encouraging innovation, such as the expanded use of blockchain, and providing strong regulatory oversight to new and existing market participants.”
Paxos will offer a “permissioned, blockchain-based post-trade platform settlement service” called Bankchain.
“We are focused on building the best infrastructure to enable a modern-day settlement solution for the precious metals market that will unlock capital, mobilize assets and create value,” said Charles Cascarilla, Paxos chief executive, in the announcement. The company did not immediately respond for comment beyond its prepared statements.
Paxos, formerly known as itBit Trust Co., was the first virtual currency company to receive a charter from the department in May 2015. The company addressed in its charter application its intent to expand its business to include services aside from the bitcoin exchange.
Only one other company, Gemini Trust Co., has received this type of charter from NYDFS.
Genesis Global Trading, which helps institutional investors in trading large sums of digital currencies, was granted a “BitLicense.”
Only four other firms have received this virtual currency license so far—bitFlyer USA Inc., Coinbase Inc., XRP II and Circle Internet Financial.
“Although we have operated under a safe harbor provision in recent years, today's decision is an important step forward and reaffirms the robust compliance measures we have enacted as a trusted trading partner,” said Michael Moro, chief executive with Genesis, in a statement Thursday.
Genesis, which declined to comment beyond the press release, is now approved for offerings of bitcoin, ethereum, ethereum classic, bitcoin cash, ripple, litecoin and zcash.
Vullo's office conducted a comprehensive review of Genesis' application, including its anti-money laundering, anti-fraud, capitalization, consumer protection and cybersecurity policies. The fintech will be subject to ongoing supervision by the state.
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