Bitcoin ATM Operator Coinsource Receives BitLicense To Operate In New York

News, Regulation | November 2, 2018 By:

Bitcoin ATM network Coinsource has become the first crypto ATM operator to receive a full BitLicense from the New York State Department of Financial Services (NYDFS).

Coinsource, the world’s largest bitcoin ATM operator with over 200 machines, currently operates 40 bitcoin ATMs in New York, located in New York City, Westchester and Nassau County. It has been operating in New York under a provisional license since 2015. The NYDFS BitLicense will allow Coinsource to install more machines within the city without special provisions.

The NYDFS said the approval follows a comprehensive and rigorous review of Coinsource’s application and is subject to significant regulatory conditions, all of which will be subject to examination and inspection by NYDFS examiners as well as independent consultants to ensure that important protections for New York markets and consumers are being met.

“Today’s approval is a further step in implementing strong regulatory safeguards and effective risk-based controls while encouraging the responsible growth of financial innovation,” said NYDFS Superintendent Maria T. Vullo. “New York’s financial services marketplace is thriving with companies committed to complying with NYDFS’s regulations that ensure the security of transactions, safeguard the industry and protect consumers.”

BitLicense was formulated in 2015 and has been among the most difficult license to obtain for crypto businesses seeking to operate in New York. Coinsource joins only 11 other companies in the crypto space to receive this license, and is the only bitcoin ATM operator to have done so.

“It’s been a long, involved process,” said Coinsource general counsel Arnold Spencer. “The initial application was [in 2015, and] since then what we’ve seen is a great deal of diligence on NYDFS’ part, really pushing us to both explain and in some cases improve our policies and procedures.”

Sheffield Clark, CEO of Coinsource, said that now that Coinsource is a license holder, their customers can buy and sell with confidence that Coinsource meets and exceeds the high standards set by the NYDFS.

“New York represents not just a center of global innovation but also one of our largest target markets,” said Clark. “We are extremely proud to be the only BTM operator holding a New York virtual currency license.”

Currently, Coinsource ATMs only support bitcoin, but the company expects that in 2019 they will be licensed in all 50 states to do more types of money transmission. Spencer said that by then they will “be in a position to have people deposit cash into machines and transfer bitcoin into a third-party wallet, provided both customers were registered.”