Risk & Compliance

New York Grants BitLicense to Square

Twitter CEO Jack Dorsey, who founded the company, said he was a "huge fan" of bitcoin but the move was contentious internally.
William SprouseJune 18, 2018
New York Grants BitLicense to Square

Square, the digital payments firm founded by Twitter CEO Jack Dorsey, has received a BitLicense from the New York Department of Financial Services, DFS announced.

Since March, the company had been seeking a license to expand its Cash App’s bitcoin buying option to New York, a spokesperson confirmed at the time. The license enables New York residents to buy and sell bitcoin through the app.

“DFS is pleased to approve Square’s application and welcomes them to New York’s expanding and well-regulated virtual currency market. DFS continues to work in support of a vibrant and competitive virtual currency market that connects and empowers New Yorkers in a global marketplace while ensuring strong state-regulatory oversight is in place,” DFS Superintendent Maria Vullo stated.

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In 2015, New York began requiring virtual currency firms that do business in the state to get a license to hold customer funds and exchange virtual coins for dollars and other regular currencies. It’s considered one of the strictest states for cryptocurrency businesses.

Last month at a conference, Dorsey said he hoped bitcoin would become the native currency of the internet. “I am a huge fan,” he said, but he added the decision to enable users to buy and sell bitcoin in the Cash App had been a “pretty contentious move within the company” and remained a source of internal tension.

To get a BitLicense, firms must go through a comprehensive review of their anti-money laundering, anti-fraud, and cybersecurity policies. So far the New York regulator has approved virtual currency charters or licenses for Xapo, Genesis Global Trading, bitFlyer USA, Coinbase Inc, XRP II, and Circle Internet Financial, and charters to Gemini Trust Company and Paxos.

Last fall, Square said a small number of Cash App users were given the option to buy or sell bitcoin within their accounts but were not, reportedly, allowed to use the currency to make payments.