Square Joins Xapo, Genesis in New York BitLicense Grant for 2018
Last week the New York State Department of Financial Services (DFS) announced approval for Square, Inc. virtual currency licence or BitLicense, bringing the grand total of Bit Licensees to seven since the scheme was implemented in 2015, with two other charters approved for Gemini and itBit (Paxos). In just a month’s time, 32 days to be exact, New York’s DFS has granted more BitLicenses in 2018 than any previous year. Genesis Global Trading was approved on May 17, Xapo, Inc. on June 14, and Square, Inc. on June 18. The month of June this year alone had as many BitLicenses granted as the combined years of 2015 and 2016: two. DFS proudly announced in a June press release “DFS Continues to Advance Responsible Growth in New York’s FinTech Industry With New Virtual Currency Approvals.”
Before the Square and recent BitLicenses, this slow pace has brought harsh criticism to the NY BitLicense scheme from both market participants and legislators hoping to bring cyrptocurrency business back to the country’s financial capitol. New York State Assembly legislator Ron Kim wants to provide New Yorkers with cryptocurrency services by changing the restrictive nature of the BitLicense. Recently Kraken cryptocurrency exchage CEO Jesse Powell made headlines for not complying with the New York Attorney General’s request for business information for their exchange along with 12 others crypto exchanges. Powell, constantly critical of the 2015 license, exclaimed this is why cryptocurrency business fled the state in a MarketWatch article written by Aaron Hankin. “Kraken’s BitLicense-prompted exit from New York in 2015 pays another dividend today. . .I realized we made the wise decision to get the hell out of New York three years ago and that we can dodge this bullet,” The CEO’s tweet reads.
“Kraken left New York because New York is hostile to crypto…”—CEO Jesse Power, Kraken cryptocurrency exchange.
The tight regulations not only affect Indeed, the NYDFS has denied Bitlicenses and to many virtual currency businesses, including ChangeCoin Inc., Ovo Cosmico Inc., Snapcard Inc. and OKLink PTE. LTD. Many refuse to even try because of the high costs of the application.
Square can now Sell Bitcoin in New York Through Cash App
With its new BitLicense, square can now sell Bitcoin to New Yorkers through their exchange platform Cash App. Prior to this Square only held a Money Transmitter License in the state of New York which did not allow it to exchange in cryptocurrence as money service business. Brian Grassadonia, head of Cash App. expressed his excitement, “We are thrilled to now provide New Yorkers with Cash App’s quick and simple way to buy and sell bitcoin.” Squares’s Cash App will allow New Yorkers the ability to buy and sell Bitcoin, but most importantly the current Square payment users may have the potential to accept Bitcoin payments in the future. The DSF press release read, “DFS has conducted a comprehensive review of Square’s application, including the company’s anti-money laundering, anti-fraud, capitalization, consumer protection, and cybersecurity policies. The new licensee is subject to ongoing supervision by DFS.”
If the NYSDF continues its current approval pace, New Yorkers could benefit from the Blockchain and Cryptocurrency market they have been excluded from with the restrictive regulations. More business approved means more competition and a healthy competitive cryptocurrency market in the state of New York.
Felix Shipkevich is a principal of Shipkevich PLLC. His practice focuses on providing counsel to FinTech and financial services firms, including financial technology, payments and emerging digital currency space. He has spoken at national panels in the money transmitter space and payments industry. Mr. Shipkevich’s payments practice has brought him into contact with money transmitter registration requirements in all fifty U.S. States.
To read his full profile, click here.