The Bitcoin exchange itBit has applied to become a trust company in New York State a move that would make it the first cryptocurrency firm to receive such a license in the U.S.
itBit Trust Company LLC sent articles of organization to New York's Department of Financial Services on Feb. 3, according to a public notice on the agency's website. A number of high-profile former regulators and politicians are listed as backers, including former Federal Deposit Insurance Corp. head Sheila Bair, former New Jersey senator and member of the Senate Finance Committee William Bradley and former Financial Accounting Standards Board director Robert Herz. Their involvement with itBit, co-founded by chief executive Charles Cascarilla in 2012, had not previously been announced.
New York regulators have been become increasingly invested in the question of how Bitcoin companies should be regulated as the digital currency and related technologies gain traction in the U.S. DFS superintendent Benjamin Lawsky proposed a controversial set of requirements for digital currency firms in July 2014.
A trust charter could help itBit gain the confidence of future investors, according to Martin Mushkin, an attorney specializing in Bitcoin law.
"It's getting good publicity to show that it really wants to be upfront and aboveboard," said Mushkin. "The advantage of being regulated and carrying on business in compliance with regulation is that people will feel more comfortable with them than some outfit that tries to go around it."
itBit currently caters to institutional and retail investors in Singapore looking to buy and sell bitcoins. Reuters reports that the application is "part of itBit's plan to expand its business into different corners of financial services."
Cascarilla and Emil Woods, who together with Cascarilla co-founded the hedge fund Cedar Hill Capital Partners in 2004, are also listed as organizers on the application.