ItBit becomes first bitcoin firm to get New York charter; raises $25m
07 May 2015 | 6951 views | 0
ItBit has raised $25 million in funding and become the first virtual currency firm to receive a charter from New York state's financial regulator, enabling the exchange to open its doors to customers throughout the US.
The trust company charter from the New York State Department of Financial Services (NYDFS) enables itBit to operate as a fully regulated financial services firm throughout the US, and was granted after a "rigorous review," which looked into anti-money laundering, capitalisation, consumer protection, and cyber security standards.
Most Bitcoin-related companies in the US have taken a different regulatory route, applying for money transmitter licenses in individual states. The charter option also eschews the BitLicense system currently being finalised by the NYDFS, although the watchdog says that itBit will have to meet obligations associated with these regulations when they arrive, possibly later this month.
ItBit claims that the NYDFS oversight means unparalleled security and protection for all client deposits and assets, which are held in secure custodial accounts.
CEO Charles Cascarilla says: "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."
Meanwhile, the exchange - which already serves international customers from a Singapore office - has also raised $25 million in a Series A funding round joined by existing investors RRE Ventures, Liberty City Ventures and Jay W. Jordan II, as well as new participants including Raptor Capital Management chairman James Pallotta.
The money will be used to scale, with the promise of new products and services, as well as hiring across all functions including engineering, compliance, operations, marketing and customer service.
In addition, three high-profile names have been added to the board: former US senator Bill Bradley, ex-FDIC chairman Sheila Bair, and former Financial Accounting Standards Board chair Robert Herz.