Bitstamp Gets BitLicense After a Three-Year Struggle to Complete Procedure
The strict requirements of BitLicense have made many exchanges abandon New York.
Bitstamp, the Luxembourg-based cryptocurrency broker and exchange platform, has received a BitLicense, the business license from the New York State Department of Financial Services. This will allow Bitstamp to continue offering services in the USA, as well as expand in New York, the company announced.
Bitstamp is one of the trusted exchanges where the Bitcoin (BTC) markets are used to set the pricing for CME futures, along with other spot markets on Coinbase, Kraken, ItBit and Gemini.
“Obtaining a BitLicense is a key element in ramping up our presence in the United States, especially when it comes to working with institutional investors,” Bitstamp announced.
Bitstamp took as much as three years to complete the procedure. BitLicense came into force in August 2015, leading to an exodus of some of the leading exchanges from New York, including Poloniex and Kraken.
Among holders of BitLicense are brokers like Coinbase, as well as cryptocurrency companies like Ripple, XAPO, Square Inc., Robinhood Markets Inc., BitPay and others. Part of the BitLicense requirement involves a know-your-customer procedure, which has become more common in the past year. Currently, some firms continue to exclude New York from token offers or exchange services, including Bitfinex and Shapeshift.
The current BitLicense for Bitstamp allows for the trading of only a handful of assets - BTC, Bitcoin Cash (BCH), Ethereum (ETH) and Ripple’s XRP. Bitstamp also faced limitations in the state of Washington, withdrawing services. While the Bitstamp exchange is not specifically licensed, it is compliant with European Union regulations on potential money laundering. AML measures are at the core of BitLicense requirements. With the addition of Bitstamp, New York now has 19 fully compliant digital asset companies.
But even for licensed companies like Coinbase, not all assets are offered for all markets, with limitations for some of the newly added coins. Since the boom in digital assets, compliance and transparency have become of utmost importance, as well as the reliability of exchanges and market operators. Exchange hacks are still one of the greatest source of losses, and markets without KYC procedures are still used to sell off stolen digital assets.