People of New York can now invest in Bitcoin, Bitcoin Cash, Bitcoin SV, Ethereum, Ethereum Classic, Litecoin, and Dogecoin on Robinhood Crypto app after the company secured the mandatory BitLicense.
The companies that are interested to offer cryptocurrency trading and storing services in the state of New York are required to obtain the restrictive BitLicense authorization from the New York Department of Financial Services (NYDFS).
Why is it important for Robinhood Crypto app to receive a BitLicense and operate in the state of New York?
Earlier this year we had several cases where important crypto exchanges entered into conflict with the New York state regulators – in this case the New York Department of Financial Services – that demanded additional private information from the exchanges and/or denied a BitLicense.
One of the most relevant cases revolves around Bittrex exchange whose application for a BitLicense was rejected by the NYDFS due to deficiencies in complying with the regulator’s demands regarding KYC and AML procedures.
Another relevant case to showcase the difficulty of securing a BitLicense from the NYDFS is connected to San Francisco-based exchange Kraken that received a request for information from the dreaded New York regulator three years after the company stopped accepting New York state customers. Jesse Powell, Kraken CEO, added that if they were to respect the demand, they would have been forced to reveal all their users’ private details.
Many voices from the blockchain industry highlighted the necessity of generating a dialogue between crypto players and state regulators to work together on creating a transparent and easy to follow framework that can protect users’ privacy while acting in agreement with KYC and AML demands imposed by governments all over the world.
Though there are a few companies that managed to obtain a BitLicense, the New York Department of Financial Services continues to remain an unpopular actor for blockchain-based businesses and cryptocurrency exchanges that look to offer their services to New York-based customers. Time will tell if things are to change for the better.