November 2, 2018 12:12 AM
The bitcoin ATM operator believes that the license will legitimize its business and help spur the adoption of cryptocurrency.
The New York State Department of Financial Services (DFS) issued the latest BitLicense to bitcoin ATM operator Coinsource, according to a November 1 announcement published on the regulator’s website.
The DFS developed the BitLicense regulatory framework in 2015. The framework outlines a strict set of requirements companies dealing in cryptocurrency must meet before the regulator will allow them to conduct business in the state.
Coinsource has been operating bitcoin ATMs in New York under a provisional license since 2015, and according to the press release, the company currently manages 40 different bitcoin ATMs throughout New York, Westchester, and Nassau counties. Customers can use these bitcoin ATMs to purchase bitcoin with cash and store it in their wallets or sell the bitcoin they have already stored for fiat.
Explaining the benefits of using a bitcoin ATM over a more traditional exchange platform, Coinsource CEO Sheffield Clark told ETHNews:
“Besides having some of the lowest fees in the bitcoin ATM space, [bitcoin] ATMs provide an unparalleled level of convenience by allowing users to skip the lengthy process of withdrawing cash, depositing it into a bank, linking a bank account to an exchange, making exchange deposits, etc.”
The approval process for a New York BitLicense is time-consuming. The process “involves an extensive review of the applicant’s policies, including its anti-fraud, consumer protection, and cybersecurity practices.” These regulations have been criticized for being too expensive and unnecessarily invasive, and have even caused companies such as Kraken and ShapeShift to leave the state.
According to Clark, Coinsource was willing to jump through all the required hoops to obtain the license because he feels that it gives the company legitimacy while at the same time serving as a “legitimizing factor towards bitcoin as a currency.”
Clark is notably optimistic about the effect bitcoin ATMs can have on the cryptocurrency industry. He told ETHNews:
“In terms of making this new global financial infrastructure more accessible to the average person, I believe that bitcoin ATMs will continue to play a crucial role. Bitcoin ATMs will likely go on to serve as a gateway to many retail consumers who previously felt intimidated by the confusing process of buying bitcoin.”
This is only the 12th BitLicense the DFS has issued. Coinsource now joins the likes of Circle Internet Financial, Coinbase, and Genesis Global Trading.
Nathan Graham is a full-time staff writer for ETHNews. He lives in Sparks, Nevada, with his wife, Beth, and dog, Kyia. Nathan has a passion for new technology, grant writing, and short stories. He spends his time rafting the American River, playing video games, and writing.
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