Coinsource nabs NYDFS virtual currency licence

Bitcoin ATM operator Coinsource has been granted a virtual currency licence, aka a Bitlicense, from the New York State Department of Financial Services (NYDFS).

“This approval is a further step in implementing strong regulatory safeguards and effective risk-based controls while encouraging the responsible growth of financial innovation,” says Superintendent Vullo of the NYDFS. “New York’s financial services marketplace is thriving with companies committed to complying with DFS’s regulations that ensure the security of transactions, safeguard the industry and protect consumers.”

The NYDFS has attempted to keep up with fast changing times by licencing technology-based money transmitters under New York’s money transmitter law; online lenders under New York’s banking law; and virtual currency exchanges under New York’s financial services law. To date, it has approved 12 charters or licences for companies in the virtual currency marketplace.

Coinsource operates 40 Bitcoin kiosks in New York, located in New York City, Westchester and Nassau County.  The company allows customers to insert cash and buy Bitcoin (and store it on their mobile wallet) or sell Bitcoin for cash (by scanning their mobile wallet at the kiosk).

“Coinsource is the first and only company that operates BTMs to receive a New York virtual currency license. All New Yorkers — from the people that are unbanked to the people who own the banks — can use our kiosks in their neighbourhood retail locations to buy Bitcoin instantly in a convenient and familiar way,” says CEO of Coinsource Sheffield Clark.

“Now that we are a licence holder, our customers can buy and sell with confidence that we meet and exceed the high standards set by the New York Department of Financial Services. New York represents not just a centre of global innovation but also one of our largest target markets. We are extremely proud to be the only BTM operator holding a New York virtual currency licence.”

The approval is based on a series of requirements including to:

• Implement, monitor and update effective risk-based controls and appropriate BSA/AML and OFAC controls to prevent money laundering or terrorist financing.
• Implement, monitor and update effective risk-based controls to prevent and respond to any potential or actual wrongful use of Bitcoin, including but not limited to its use in illegal activity, market manipulation, or other similar misconduct, as required by NYDFS’s 7th February 2018, “Guidance on Prevention of Market Manipulation and Other Wrongful Activity”.
• Compliance with NYDFS’s transaction monitoring and cybersecurity regulations.
• Maintain policies and procedures for consumer protection and to promptly address and resolve customer complaints.