Bitcoin exchange, ItBit, has managed to raise $25 million in funding, in essence becoming the inaugural digital currency firm to receive a charter from the New York State Department of Financial Services (NYDFS), according to an ItBit statement.
The charter has never before been granted to a digital currency firm, which in and of itself is a milestone for both Bitcoin proponents and state regulators – the cryptocurrency has indeed faced its fair share of regulatory hurdles and stigmas over the past few years with this measure helping to solidify not only Bitcoin’s legitimacy in the state, but ItBit’s presence.
The NYDFS charter will enable ItBit to operate as a fully regulated financial services firm in the US, following an extensive and comprehensive review that touched upon traditional cryptocurrency woes. These included anti-money laundering, capitalization, consumer protection, and cyber security standards, traditional lynchpins facing the spread of digital currencies in many countries.
Moreover, the charter option also abstains from the BitLicense system currently being finalized by the NYDFS – however, ItBit will still be required to meet obligations associated with these regulatory obligations, whenever they come to fruition.
The charter is a huge win for ItBit, which has lauded that with NYDFS oversight comes an unparalleled level security and protection for all client deposits and assets, which are currently held in secure custodial accounts.
Conversely, the majority of Bitcoin-related companies operating in the US opted for a different regulatory route, instead applying for money transmitter licenses in any one of the fifty individual states.
The $25 million in funding will be ‘used to scale’, along with the rollout of new products and services, as well as an uptick in hiring across all functions at the firm.
According to ItBit CEO Charles Cascarilla in a recent statement on the charter, “Regulatory approval from the NYDFS allows us to serve as a custodian for our clients’ assets and expand our services to U.S. customers – the largest market of bitcoin traders in the world – and allows us to do so with the highest standard of care afforded by any Bitcoin company.”
— Ben Lawsky (@BenLawsky) May 7, 2015