But the BitLicense has come in for intense criticism from cryptocurrency entrepreneurs. Speaking at CoinDesk’s Consensus 2018 conference Tuesday, ShapeShift CEO Erik Voorhees called the regulation an “absolute failure” that “should be removed.” He said it was “pathetic” that only a handful of firms had received BitLicenses after three years. “That’s the rate of innovation in New York.”
Despite lacking a BitLicense prior to this week, Genesis Trading has been operating in New York under a safe harbor provision.
The exchange caters to high net worth and institutional investors and offers round-the-clock trading in bitcoin, bitcoin cash, ether, ethereum classic, XRP, litecoin and zcash.
Separately, the DFS also authorized Paxos Trust Company, formerly known as itBit, to operate “a permissioned, blockchain-based post-trade platform settlement service” for precious metals, called Bankchain.
Paxos holds a limited-purpose trust company charter from DFS, as does Gemini Trust Company, a cryptocurrency exchange.
New York became the first state to craft a regulatory structure specifically for cryptocurrencies in 2014, and finalized the BitLicense in August 2015.
The other four firms to receive the license are Circle, in 2015; XRP II, a Ripple subsidiary that sells XRP, the following year; and Coinbase and bitFlyer in 2017.