BitGo seeks to become a qualified crypto custodian in New York state

Digital asset financial services firm BitGo is applying to become a qualified cryptocurrency custodian in New York state.

In its announcement on Aug. 25, BitGo said its decision was spurred by fresh regulatory developments in the United States —- specifically, the Office of the Comptroller of the Currency’s recent granting of permission to federally chartered banks to custody cryptocurrencies.

As a consequence, BitGo says it is “expecting a dramatic increase in market demand for its products and services from banks, pension funds, hedge funds and other fiduciaries.” 

BitGo has formally applied for a New York Trust Charter from the New York State Department of Financial Services (NYDFS), which would allow it to operate as a qualified custodian under New York State Banking Law.

If approved, the BitGo New York Trust would offer institutional investors NYFDS oversight, Know Your Customer and Anti-Money-Laundering compliance, offline cold storage for cryptographic keys and insurance coverage on the market today of up to $100 million in digital assets.

BitGo is well known in the crypto industry for its pioneering work on multi-signature cryptographic technology, which provides higher-grade security for cryptocurrency wallets.

Earlier this year, the firm set up two new custodial subsidiaries in Switzerland and Germany, each regulated by the authorities in their respective jurisdictions.

NYDFS is one of the crucial regulatory agencies for crypto-related businesses in New York state and issues a well-known and exacting operating license for specific cryptocurrency service providers, known as the BitLicense. 

Last fall, Fidelity Digital Asset Services procured a charter from NYDFS to operate as a limited liability trust company and offer a cryptocurrency custody and execution platform for institutional and retail investors in the state.