Coinsource, which is claimed to be the world's largest Bitcoin ATM network, has secured virtual currency license from the New York State Department of Financial Services (DFS).
Image: DFS gives virtual currency license to Coinsource. Photo: Courtesy of David Shares/Unsplash.
Coinsource owns and operates about 40 touchscreen kiosks across New York City, Westchester and Nassau County.
Customers can 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 claims to be the first DFS virtual currency licensee to operate Bitcoin Teller Machines (BTM).
The New York regulator has given its approval after a review of Coinsource’s application. It is also subject to regulatory conditions which will be examined and inspected by DFS examiners along with independent consultants to ensure important protections for New York markets and consumers are being met.
The approval is based on stringent requirements such as implementing, monitoring and updating effective risk-based controls and appropriate Bank Secrecy Act/ anti-money laundering (BSA/AML) and Office of Foreign Assets Control (OFAC) controls to prevent money laundering or terrorist financing.
Implementing, monitoring and updating effective risk-based controls to prevent and respond to potential or actual wrongful use of Bitcoin. This includes its use in illegal activity, market manipulation, or other similar misconduct, as required by DFS’s 7 February, 2018, ‘Guidance on Prevention of Market Manipulation and Other Wrongful Activity.’
Compliance with DFS’s transaction monitoring and cybersecurity regulations. Maintaining policies and procedures for consumer protection and to promptly address and resolve customer complaints.
Coinsource CEO Sheffield Clark said: “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 neighborhood retail locations to buy bitcoin instantly in a convenient and familiar way.
“Now that Coinsource is a license holder, our customers can buy and sell with confidence that Coinsource meets and exceeds the high standards set by the New York Department of Financial Services. New York represents not just a center 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 license.”
DFS stated that it has responded to innovations by licensing technology-based money transmitters under New York’s money transmitter law, online lenders under New York’s banking law and virtual currency exchanges under the state’s financial services law.
Financial Services superintendent Maria Vullo said: “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.
“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.”