Robinhood, the popular zero fee commission stock and crypto trading app has finally landed in New York. The company announced in a press release published via its website:
As of today, New Yorkers can officially invest in cryptocurrencies on Robinhood Crypto. Currently, you can invest in seven cryptocurrencies on Robinhood Crypto: Bitcoin, Bitcoin Cash, Bitcoin SV, Ethereum, Ethereum Classic, Litecoin, and Dogecoin. You can also track price movements and news for those and 10 additional cryptocurrencies.
Robinhood had initially acquired the NY BitLiscence otherwise known as the money transmitter license in Janurary ’19 from the New York Department of Financial Services (NYDFS). Despite having been released in 2014 and made a mandatory requirement to operating any cryptocurrency activities in the region Robinhood is still only one of around 20 other companies to be issued the license.
The 46 page document lays out requirements to entry which has lead to much criticism from those within the space due to the high bar that favours large institutions of startups. Bittrex which trades close to $100m worth of crypto daily was rejected and has yet to gain approval as it lacked, according to regulators, satisfactory “customer due diligence, a lack of transaction monitoring, and an absence of experienced compliance staff”
Other companies seeking approval will also require a high level of anti money laundering and anti-fraud procedures to be in place and a dedicated compliance officer/team at all times as well as a maintenance of minimum reserves to name but a few. As such ensuring all this can be a very expensive process which isolates competition and drives innovation in the space elsewhere.
Additionally, any company which plans to introduce a “material change” to their business model, such as a new product or service, must notify and obtain consent from the superintendent of the NYSDFS. The Superintendent is also required to approve any merger / acquisition of any company holding a BitLicense, requirements that no ordinary business is subject to.
- David Alder, Fordham Law School
NY is that abusive, controlling ex you broke up with 3 years ago but they keep stalking you, throwing shade on your new relationships, unable to accept that you have happily moved on and are better off without them.
- Jesse Powell, CEO Kraken
BitLicense is officially law in NY today. Shed a tear for freedom, capitalism, and innovation. Then, comply citizen.
- Eric Voorhees, CEO Shapeshift