Having filed its registration application in New York, ItBit is looking to become the first regulated Bitcoin bank in America.
ItBit, a digital currency exchange operationally based in Singapore and with a head office in New York, looks to become the first officially regulated Bitcoin bank as they look to expand their service offering. The move would allow the company to legitimately take on a more traditional banking service role while meeting relevant legal requirements.
According to Reuters, people privy to the matter expect that the application could be approved “in the next couple weeks.”
The exchange appears ready to tackle the challenges of meeting the financial regulations having appointed Erik Wigenhof Plante, who previously worked with Ebay as their Chief Compliance Officer. Speaking to Bloomberg Business in May, Plante explained his view of Bitcoin regulation.
“The second wave of Bitcoin companies, like ItBit, aims to have institutional investors as clients, and to create trust. With trust of course comes regulation, as without regulation it's very hard to create this trust. Once regulators come out with proper and pragmatic regulation, we will see an upsurge [in Bitcoin] no doubt.”
ItBit's website also addresses the company's attitude towards financial regulation and explaining how the startup sees compliance with established legislation around Anti-Money Laundering (AML) and Know Your Customer (KYC) protocols.
“One of itBit’s core principles is establishing and maintaining regulatory compliance within all jurisdictions we operate--a key point of differentiation from our competition. itBit’s stringent Anti-Money Laundering/Know Your Customer (AML/KYC) program ensures that clients trade in a trusted environment.”
In New York especially, getting regulations correct from the jump could be extremely important for the exchange. The back-and-forth debate over New York Department of Finance Superintendent Benjamin Lawsky's controversial BitLicense has resulted in changes to avoid “a crazy quilt patchwork that can get hard to comply with.” However, it remains to be seen how the final version will look when it will be released in May.
The BitLicense is designed to increase the scrutiny applied to cryptocurrency businesses operating in the state of New York, with requirements for exchange operators to be personally registered and finger-printed by the authorities along with strict capital requirements and transparent record keeping practices.
ItBit was founded in 2012, and has attracted US$3.3 million in a round of seed funding in late 2013.
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