Popular bitcoin wallet and cold storage service provider Xapo, which reportedly holds 7 percent of BTC’s supply in cold storage vaults, has recently been granted the sixth-ever BitLicense by the state of New York, which allows the firm to offer its services to the state’s residents.
According to an announcement, the New York Department of Financial Services (NYDFS) granted Xapo the license after conducting a “comprehensive review of Xapo’s application,” which included analyzing the firm’s “anti-money laundering, anti-fraud, capitalization, consumer protection, and cybersecurity policies.”
Maria T. Vullo, Superintendent at the Department of Financial Services, stated:
“Today’s actions represent New York’s continued commitment to creating a thriving, global fintech marketplace. Through strong and thoughtful regulatory oversight by DFS, consumers and the virtual currency market alike will continue to benefit.”
The announcement noted that the new license “is subject to ongoing supervision” from the DFS. Notably, this is the sixth-ever BitLicense the state has granted, with the first one being granted to payments startup Circle in September 2015.
The license, which is seen as formal approval from the state of New York, has since then been granted to wallet and exchange service Coinbase, cryptocurrency exchange bitFlyer USA, market maker Genesis Global Trading, and to Ripple, the company behind the XRP token.
Various industry analysts have in the past criticized the BitLicense, arguing its nature is counterproductive. ShapeShift CEO Erik Voorhees recently called it an “absolute failure” that “should be removed.”
Notably, the license was brought forth by a regulator who, after introducing it, created a firm that helps crypto companies navigate the state’s regulations. After the BitLicense came into effect in 2015, various businesses, including popular crypto exchange Kraken, decided to exit New York.
The president of Switzerland-based Xapo, Ted Rogers, stated:
“We are very pleased with the approval of Xapo's BitLicense application. It is the end result of much hard work, not just by Xapo personnel but by the DFS and its staff.”
Separately, the Department of Financial Services authorized cryptocurrency exchange itBit to add Ether, Litecoin, Stellar Lumens, and Bitcoin Cash to its platform. Paxos, the company behind ItBit, doesn’t operate with a BitLicense, but was granted a virtual currency charter, a license also given to the Winklevoss twins’ cryptocurrency exchange Gemini.