NYC Regulator Grants BitLicense to Bitcoin ATM Provider Coinsource
NYDFS approves virtual currency license of Coinsource Inc., making the BTM operator the 12th company from the cryptocurrency space to receive the BitLicense.
Bitcoin ATM network operator Coinsource has been granted a BitLicense by the New York Department of Financial Services (NYDFS), according to a press release issued on Thursday.
The approval, which took the company around three years to obtain, means New Yorkers will now be able to use any of Coinsource’s 40 touchscreen kiosks located in the state (in New York City, Westchester and Nassau County) to instantly buy and sell Bitcoin for fiat currency. With Coinsource’s BTMs (Bitcoin Teller Machine), users can insert cash and purchase BTC (which can then be stored in a mobile wallet) or sell their Bitcoin for cash (by scanning their mobile wallet at the BTM).
“Coinsource is the first and only company that operates BTMs to receive a New York virtual currency license … Now that Coinsource is a license holder, our customers can buy and sell with confidence that Coinsource meets and exceeds the high standards set by the New York Department of Financial Services … We are extremely proud to be the only BTM operator holding a New York virtual currency license,” said Coinsource CEO Sheffield Clark.
Coinsource currently operates more than 200 BTMs in 19 states throughout the US, 40 of which are located in New York (these had been operating, pre-BitLicense, under a special DFS provisional license pending full approval). The company expressed the hope that the BitLicense would bring “further validation to the BTM industry”.
Financial Services Superintendent Maria T. Vullo confirmed the news. She stated that the approval was granted after a comprehensive review of Coinsource’s application and is subject to numerous regulatory conditions. She explained that the license was geared toward “implementing strong regulatory safeguards and effective risk-based controls while encouraging the responsible growth of financial innovation”.
“New York’s financial services marketplace is thriving with companies committed to complying with DFS’s regulations that ensure the security of transactions, safeguard the industry and protect consumers”, she added.
To date, with the addition of Coinsource, the BitLicense has been granted to a total of 12 companies in the digital currency marketplace, including Genesis, Square, Coinbase, bitFlyer, Xapo, and Circle.
The BitLicense is based on a set of rules established by the NYDFS to govern cryptocurrency businesses operating in the state, and is notoriously difficult to obtain. The license came into effect in 2015, making New York the first state to introduce a regulatory framework specifically formulated for the crypto industry. However, the BitLicense has also received its fair share of criticism, owing to the convoluted and costly process that companies need to undergo in order to obtain one.