Crypto Custodian, BitGo, Applies for NYDFS Trust Charter as it Looks to Expand into New York
BitGo is looking to expand its crypto custody business in New York; the company recently applied for a Trust Charter with the New York State Department of Financial Services (NYDFS) as part of this initiative. The announcement, which was published on August 25, notes that BitGo plans to operate under the New York Banking Law as an ‘independent, regulated qualified custodian’ if approved.
Following a spike in crypto-asset demand, BitGo cited that access to the New York prospectus market will provide not only safe custody for institutional investors but also eliminate regulatory headache,
“BitGo will meet the strong demand by the world’s leading institutional investors based in New York, who are seeking to secure large amounts of digital assets with the highest level of security, regulatory oversight, and operational efficiency.”
The South Dakota qualified crypto custodian was keen to back up these prospects based on OCC’s latest move to allow U.S banks to act as crypto custodians. BitGo went on to highlight those critical financial institutions, including banks, pension funds, and hedge funds, as part of its prospective clientele.
Apart from the NYDFS regulatory oversight, BitGo is set to offer varied crypto-related services to the target group mentioned above. The announcement noted functions such as KYC/AML compliance, independently verified system controls, offline cold storage of cryptographic keys, and multi-sig tech, amongst others. Mike Belshe, the CEO of BitGo, has since expressed optimism given the NYDFS fundamentals in crypto regulation,
“New York State has developed an exceptional regulatory framework for digital assets and BitGo is very proud for this opportunity to apply for a trusted charter to serve the world’s most sophisticated community of institutional investors based in New York,”
NYDFS Progressive Approach Towards Crypto in 2020
This New York regulatory body has, in the past, been an obstacle to crypto innovations, especially after the introduction of Bitlicense, which turned five this year. Recent milestones are, however, setting a different tone hence the initiative by crypto service providers like BitGo. Some notable improvements by the NYDFS include modifications on Bitlicense to feature conditional licenses and self-certification as the regulator looks to make New York more crypto-friendly.