June 14, 2018
Contact: Richard Loconte, 212-709-1691
DFS CONTINUES TO ADVANCE RESPONSIBLE GROWTH IN NEW YORK’S FINTECH INDUSTRY WITH NEW VIRTUAL CURRENCY APPROVALS
Department Grants New Virtual Currency License to Xapo Inc.
Paxos Trust Company LLC, an Existing DFS Licensee, is Now Authorized to Offer Additional Products and Services
Financial Services Superintendent Maria T. Vullo today announced that the Department of Financial Services has granted a virtual currency license to Xapo, Inc. DFS has also authorized Paxos Trust Company LLC, formerly known as itBit Trust Company, to offer exchange and custody services for Ether, Litecoin, Stellar Lumens and Bitcoin Cash, emerging cryptocurrencies, on its virtual currency exchange.
Department of Financial Services Superintendent Maria T. Vullo said, “Today’s actions represent New York’s continued commitment to creating a thriving, global fintech marketplace. Through strong and thoughtful regulatory oversight by DFS, consumers and the virtual currency market alike will continue to benefit.”
DFS has conducted a comprehensive review of Xapo’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. Xapo is a digital financial services companying offering Bitcoin products and services. Xapo will be authorized to offer a digital wallet and a vault service, which is intended as a safe and insured method to store Bitcoins.
Xapo President Ted Rogers said, ""We are very pleased with the approval of Xapo's BitLicense application. It is the end result of much hard work, not just by Xapo personnel but by the DFS and its staff."
DFS issued a virtual currency charter in May 2015 to itBit, now Paxos Trust Company, a subsidiary of Kabompo Holdings Ltd., which operates the itBit exchange, to offer services for buying, selling, sending, receiving, and storing bitcoin. Today, DFS authorized Paxos to expand its service offering to include Ether, Litecoin, Stellar Lumens and Bitcoin Cash.
“This is an important milestone for itBit as we create a broader platform for crypto asset investors. We are committed to the growth and evolution of this ecosystem and DFS approval allows us to offer more trading and custody services across a wider range of crypto assets,” said Chad Cascarilla, CEO of itBit. “Regulatory oversight and security have always been at the forefront of building our platform. We are thrilled to be able to offer these new services to our customers.”
The Ethereum network is a cryptocurrency and blockchain platform. Ether is the digital cryptography-based asset of the Ethereum network, similar to how bitcoin is the digital cryptography-based asset of the Bitcoin network. Litecoin, developed as a modification of the Bitcoin protocol, is a well-known and long standing virtual currency that is nearly identical to Bitcoin. Litecoin was the first alternative virtual currency to bitcoin to launch and gain acceptance. Bitcoin Cash is the digital cryptography-based asset of the BCH network, and Lumens are the native virtual currency asset of the Stellar network.
With the Xapo approval, DFS has now approved eight firms for virtual currency charters or licenses, while denying those applications that did not meet DFS’s standards. DFS has also granted licenses to Genesis Global Trading Inc., bitFlyer USA, Coinbase Inc., XRP II and Circle Internet Financial, and charters to Gemini Trust Company and Paxos (formerly itBit Trust Company).