New York Just Issued Its First BitLicense

New York Just Issued Its First BitLicense
Image credit: Zach Copley | Flickr

Circle Internet Financial, a Boston-based bitcoin startup backed by Goldman Sachs GroupInc, has received New York's first BitLicense, allowing it to offer digital currency services in the state.

The firm, founded in 2013, released a new version of its mobile payment service on Tuesday.

The BitLicense from the New York Department of Financial Services is based on the first set of U.S. state guidelines for companies that operate in virtual currencies such as bitcoin, which is created and exchanged independent of banks.

The guidelines, issued in June, are aimed at protecting consumers, preventing money laundering and boosting cyber-security.

Circle uses bitcoin blockchain technology to allow consumers to send and transmit dollars, President and co-founder Sean Neville said in an interview. "We think of ourselves as a consumer finance company. We see bitcoin as an enabling technology."

Circle still relies on banks, and partners with Silicon Valley Bank in the United States, he noted.

The firm has obtained or is seeking money transmitter licenses in other states as well.

Existing virtual currency firms that operate in New York have until August 10 to apply for a BitLicense. To date, the New York Department of Financial Services said it has received 25 applications, which it will continue to evaluate for approval.

The license puts in place "rules of the road that help protect consumers from loss or theft and root out illicit activity," Anthony Albanese, the regulator's acting superintendent, said in a statement on Tuesday.

Circle is backed by $76 million in venture capital from Goldman Sachs and other investors, according to its website. Its last venture capital round was co-led by Goldman and Chinese investor IDG Capital Partners.

(Editing by Jonathan Oatis)

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