itBit Becomes First Bitcoin Company to Apply for Banking License

Bitcoin exchange itBit has applied for a banking license with the New York Department of Financial Services in order to officially operate as a financial institution The exchange is reportedly awaiting approval from the state banking authority within the next two weeks. If approved, itBit would become the first bitcoin company to subject itself to the increased regulatory scrutiny that comes with being classified as a banking institution.

itBit, which is presently merely an exchange for buyers and sellers to trade bitcoin, seeks to expand this limited business model to incorporate a wider variety of financial services. The company also hopes that the official recognition and regulation will assure customers that the company is both reputable and secure after the dramatic collapse of its competitor Mt. Gox in 2014.

Some highly publicized failures and potentially illegal activity have focused attention on virtual currencies and have highlighted the need for a sound regulatory framework for virtual currencies,

wrote itBit Chief Exexutive Charles Cascarilla in an October letter to the DFS.

The DFS application also lists a number of well-known financial regulators and other government officials as the company’s “organizers,” including former FDIC chairman Sheila Bair and former New Jersey Senator Bill Bradley.

 

Read more here – “Exclusive: Bitcoin exchange itBit seeks New York banking license,” (Lauren LaCapra, Reuters).

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