Bitcoin ATM Operator Coinsource Gets License From New York Regulator

New York State Department of Financial Services (DFS) said Thursday that it has approved the application of bitcoin teller machines operator Coinsource for a virtual currency license. The announcement by Superintendent Maria T. Vullo made it legal for New Yorkers to use their mobile phones to obtain bitcoin or sell it for cash at kiosks similar to ATMs in and around New York City.

“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," said Superintendent Vullo.

Based in Fort Worth, Texas, Coinsource has 40 bitcoin kiosks in the state — placed in New York City and Westchester and Nassau counties. 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 CEO Sheffield Clark said: “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.”

The Department of Financial Services said that it has "rapidly responded" to innovations by granting licenses to technology-based money transmitters. The press release also said that to date, DFS has approved 12 licenses for companies in the virtual currency marketplace.

The DFS approval follows a comprehensive review of Coinsource’s application, which include significant regulatory conditions with respect to money laundering, market manipulation, transaction monitoring and consumer protection. Coinsource, founded in 2015, has more than 200 ATM machines in 19 states — deployed in key population centers across the United States.

The other companies in crypto space which have gained approval from DFS include BitFlyer, BitPay, Coinbase, Circle, Genesis Global Trading, XRP II, Square, and Xapo, with charters issued to Gemini Trust Company, Paxos, and Coinbase Custody Trust Company LLC.

While in New York financial regulators are moving fast to legalize innovation and encourage crypto players, a different kind of news was reported recently from Bangalore, known as the Silicon Valley of India. The Bangalore police on Oct. 20 arrested the CEO and cofounder of Unocoin, one of India's leading crypto asset and blockchain companies, for installing cryptocurrency kiosks. In India, cryptocurrency are not recognized as a legal tender, and banks in the country are prohibited from supporting any fiat-to-crypto transactions.