New York has awarded two more BitLicenses. Two subsidiaries of Seed CX are now allowed to trade in crypto assets. The New York offer for institutional investors is thus increasing overall.
Two other crypto companies have successfully met the stringent requirements of the New York State Department of Financial Services (NYDFS). The local tax authority announced on July 15 that it has awarded two of its coveted BitLicenses to Seed Digital Commodities Market LLC (SCXM) and Zero hash LLC. Companies can now offer crypto currency services to institutional investors. Both companies are subsidiaries of the trading platform Seed CX. Zero Hash LLC also received a money transfer license.
The BitLicense allows SCXM to act as a “matching engine” for buyers and sellers of Bitcoin and other cryptocurrencies. In addition, financial institutions and larger trading companies can use the platform for crypto-block trades. Block trades are off-exchange trades with larger packages of assets. Zero Hash also takes on the role of money-sender in SXCM’s activities.
Seed CX wants to take the opportunity
Edward Woodford, CEO of Seed CX, was visibly pleased with recent developments. The licenses mark the next step in Seed CX’s efforts to become a leading player in the institutional trading of digital assets:
As holders of virtual currency licenses, we will be able to expand trading and settlement services for New York companies through our institutional platform, providing strong institutional technology, operational support and compliance with institution-mandated rules.
Seed CX was founded in Chicago. The emerging platform is backed by financial giant Bain Capital. It also hopes for an early license to trade in crypto-forwards.
BitLicenses are in great demand
However, the New York BitLicenses are still a rare commodity. The New York State Department of Financial Services has so far granted only 20 of these permits. In her statement on licensing to Seed CX, Linda A. Lacewell of the tax authority emphasized the gain in business opportunities:
The approval of these new licenses by the Department will provide greater choice for institutional clients while protecting consumers and the public with strong anti-money laundering, cybersecurity and other compliance standards in a constantly evolving global financial services marketplace.
In practice, the BitLicenses are an important step in marketing their own service to institutional investors. In addition to Seed CX, the bitcoin exchange Bitstamp and Tagomi Trading LLC received one of the required approvals in 2019.