Bitcoin ATM Operator Receives BitLicense from NY State Department

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As per an official tweet, the New York State Department of Financial Services (NYDFS) has granted a BitLicense, to CottonWood Vending LLC.

Cottonwood Vending is a Bitcoin ATM operator with terminals in New York City and the neighboring area. As per the tweet, the granting of such licenses “continues to advance responsible innovation in New York’s fintech industry.”

Bitcoin ATMs are touchscreen kiosks that allow users to deposit cash and purchase bitcoin, or to scan their mobile wallet, sell their cryptocurrency and withdraw cash. Sales and purchases sync automatically to customers’ mobile wallets.

In Nov. 2018, NY State Department awarded a BitLicense to a BTM operator, Coinsource. NYDFS stated in a press release that its decision followed a thorough review of Coinsource’s application and subjects the company to significant regulatory conditions.

NYDFS introduced BitLicenses in July 2014 by Benjamin Lawsky, New York’s first Superintendent of Financial Services. The acquisition of such a license is viewed by many in the digital currency and blockchain spheres as a vital step to conducting business in the state.

Firms that get such a license are subject to certain counter-terrorism financing standards and anti-money laundering (AML) standard. Other requirements incorporate background checks on all employees, and records of transactions must be kept for 10 years.

Several companies in the crypto space have sought and obtained BitLicense from NYDFS. In July 2018, global cryptocurrency payments processor BitPay was granted a BitLicense. At the time, BitPay CEO Mr. Stephen Pair stated:

“New York state has one of the stringent policies around businesses involved in digital currency and working through the approval processes to get a License was important to BitPay. We think this hard work will pay off as New York offers significant business opportunities for BitPay.”