itBit exchange applies for banking licence

[pawel7777]

Apparently, as reported by Reuters, itBit exchange has quietly filed application for a banking license in New York.

That sounds like a pretty big news, although I'm not sure how exactly itbit will benefit from such licence.

Links:

http://uk.reuters.com/article/2015/04/23/uk-bitcoin-itbit-exclusive-idUKKBN0NE2H920150423

and:

http://www.coindesk.com/bitcoin-exchange-itbit-seeks-bank-license-with-ex-fdic-chairs-support/

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[tokeweed]

How big is itBit?  What their average daily volume in USD?

[pawel7777]

How big is itBit?  What their average daily volume in USD?

I don't think I've ever heard of them until today. It's a small exchange, the volume on the site shows 1,315.63 BTC traded (24h?). Launched Nov 2013.

https://www.itbit.com/

[SpanishSoldier]

How big is itBit?  What their average daily volume in USD?

I don't think I've ever heard of them until today. It's a small exchange, the volume on the site shows 1,315.63 BTC traded (24h?). Launched Nov 2013.

https://www.itbit.com/

AFAIK, they operate from Singapore. So why applying for Banking license at New York ? Is it the case that the journo confused BitLicense with Banking License ?

[chmod755]

AFAIK, they operate from Singapore. So why applying for Banking license at New York ? Is it the case that the journo confused BitLicense with Banking License ?

No idea why they're applying for a license in NY.  I guess a banking license includes most (if not all) requirements of a BitLicense, but allows for more different types of financial services. I don't think the Reuters journalist mixed them up:

In statements to CoinDesk, New York State Department of Financial Services (NYDFS) spokesman Matthew Anderson confirmed the filing.

[pawel7777]

How big is itBit?  What their average daily volume in USD?

I don't think I've ever heard of them until today. It's a small exchange, the volume on the site shows 1,315.63 BTC traded (24h?). Launched Nov 2013.

https://www.itbit.com/

AFAIK, they operate from Singapore. So why applying for Banking license at New York ?

My guess is because they want to start operating in the US and be able to do stuff like ACH transfers. If you visit their website it says US services are coming soon..

According to their website they have offices in Singapore and NY (and already operating in USD):

Co-founded in 2012 by CEO Charles Cascarilla, itBit has offices in two key financial markets, New York and Singapore, which enables the exchange to serve global customers around the clock.

https://www.itbit.com/h/about-itbit

[LFC_Bitcoin]

Seems a bit futile until the NYC Bitlicense is announced.
Fair play if they manage to get this approved though.

[1Referee]

I would be happier if a well known exchange such Bitstamp would do such an announcement.  But then again, it's a nice move if it happens to become reality.

While I have never heard of itBit exchange before, I must admit that they do have a decent XBT volume. Currently ~1653XBT with all fiat pairs.

[Snail2]

To be honest never heard about them until today. Anyway, good news for bitcoin.
BTW they seems to have some IRL investors as well.

[tokeweed]

"... And on they slowly become like the Gnomes of Zurich which Bitcoin was trying to avoid."

- Me

They win guys.

[johnyj]

Interesting. I suppose that bitcoin exchanges will get full banking service when they have their own bank. Bank is just a channel to facilitate the exchange with fiat money

[Anirban Sarkar]

It will be very good if it starts !!

[uininPeter]

To what extent to bitcoin exchanges need banking liscences? Do they store money in their own vaults like a regular bank or do they use other banks to store money and only act like a bank?

[imamanandyou]

To what extent to bitcoin exchanges need banking liscences? Do they store money in their own vaults like a regular bank or do they use other banks to store money and only act like a bank?

At present it's the later, there's no crypto exchange I know of that handles its own fiat banking services. That's why many exchanges have gone out of business as a result of their bank deciding to close their account so that they can no longer do fiat transfers. An exchange with its own banking capabilities would be immune from this sort of sucker punch.

That's interesting. I never realized that banks would actually just close up to a organization because they were dealing with bitcoin. Are they often because of bitcoins shady uses? Or is it some government regulation? Or were they simply not following proper tax/banking practices?

[pawel7777]

That's interesting. I never realized that banks would actually just close up to a organization because they were dealing with bitcoin. Are they often because of bitcoins shady uses? Or is it some government regulation? Or were they simply not following proper tax/banking practices?

The annoying part is that the bank can close your account without giving you actual reasons, at least in case of private accounts. Usually they'd freeze the funds first due to 'suspicious activity' and then, even know there wasn't anything wrong, they'd decide to close it.

[mmortal03]

How big is itBit?  What their average daily volume in USD?

I don't think I've ever heard of them until today. It's a small exchange, the volume on the site shows 1,315.63 BTC traded (24h?). Launched Nov 2013.

https://www.itbit.com/

AFAIK, they operate from Singapore. So why applying for Banking license at New York ?

My guess is because they want to start operating in the US and be able to do stuff like ACH transfers. If you visit their website it says US services are coming soon..

At the moment, "itBit currently does not support ACH deposits, but plans to have this funding method available in the near future."

[Amph]

That's interesting. I never realized that banks would actually just close up to a organization because they were dealing with bitcoin. Are they often because of bitcoins shady uses? Or is it some government regulation? Or were they simply not following proper tax/banking practices?

The annoying part is that the bank can close your account without giving you actual reasons, at least in case of private accounts. Usually they'd freeze the funds first due to 'suspicious activity' and then, even know there wasn't anything wrong, they'd decide to close it.

it also depends on the banks, not all banks are that strict, some of them are willing to re-open your account if you explain the situation or you ask why they closed it, anyway bitcoin is here also for this reason, the control over your money is what it was needed from the beginning

[JackRipper]

That's interesting. I never realized that banks would actually just close up to a organization because they were dealing with bitcoin. Are they often because of bitcoins shady uses? Or is it some government regulation? Or were they simply not following proper tax/banking practices?

The annoying part is that the bank can close your account without giving you actual reasons, at least in case of private accounts. Usually they'd freeze the funds first due to 'suspicious activity' and then, even know there wasn't anything wrong, they'd decide to close it.

A lot of banks are paranoid of money laundering. If you are laundering money, they could face some stiff fines if there are any indications that they knew, or were suspicious, that you were laundering money. Everyone knows that Bitcoin is simply a vehicle for money laundering and other illegal activity.  It's in all the papers.

Edit: For those who are humor impaired, the last part of my statement about Bitcoin being a vehicle for money laundering and other illegal activity was sarcasm. I didn't mean to raise anybody's blood pressure.

[Shindo1988]

That's interesting. I never realized that banks would actually just close up to a organization because they were dealing with bitcoin. Are they often because of bitcoins shady uses? Or is it some government regulation? Or were they simply not following proper tax/banking practices?

The annoying part is that the bank can close your account without giving you actual reasons, at least in case of private accounts. Usually they'd freeze the funds first due to 'suspicious activity' and then, even know there wasn't anything wrong, they'd decide to close it.

A lot of banks are paranoid of money laundering. If you are laundering money, they could face some stiff fines if there are any indications that they knew, or were suspicious, that you were laundering money. Everyone knows that Bitcoin is simply a vehicle for money laundering and other illegal activity.  It's in all the papers.

Edit: For those who are humor impaired, the last part of my statement about Bitcoin being a vehicle for money laundering and other illegal activity was sarcasm. I didn't mean to raise anybody's blood pressure.

Don't be afraid, you are just telling the truth, 99% of bitcoin use are money laundering and other illegal activities. i back you up.

LOL.

ANd to add to it, my guess that itBit wants a banks license in New York is to allow big players of the Bitcoin scene to "move" their money.
AFAIK a lot of banks is U.S. close accounts of people that are involved with Bitcoin.