Many crypto personalities have expressed at some point or the other that New York state holds a very strict approach when it comes to cryptocurrency business related approvals. But, this time New York Financial Regulators have granted a major approval for a crypto-based operation.
Authorities at New York have approved a US-based operator of Bitcoin ATMs named Cottonwood Vending LLC. The ATM provider is the second entity to get one such license. Cottonwood has received a famously known BitLicense from the New York State Department of Financial Services (NYDFS). It is a ‘much in demand’ type of License. New York already had around 20 crypto firms which possess licenses to operate, trade or transfer digital currencies. Now, Cottonwood is added to the list of New York-based officially crypto operating companies.
The announcement of the approval made through the Twitter handle of NYDFS:
DFS Grants Virtual Currency License to Cottonwood Vending LLC, Continues to Advance Responsible Innovation in New York’s Fintech Industry
— NYDFS (@NYDFS) January 31, 2019
Bitcoin ATMs are basically touchscreen kiosks, which can be used to deposit cash and then one can buy or sell crypto or can scan their mobile wallet, and withdraw cash. With these ATMs sales and purchases sync automatically with users’ mobile wallets. Moreover, obtaining a BitLicense requires to fulfill and comply with standards and rules regarding anti-money laundering, cybersecurity, and consumer safety. The regulators also demand assurance from the ATM operator that the system and technology used for the ATM are not involved in any criminal purposes. Also, it is required to have a repository of transaction records.
Notably, Cottonwood holds a vast Bitcoin ATM network in New York. The user base of Cottonwood is quite significant. Also, the firm manages around 100 machines. In the regulatory records, it shows that the company has generated $35 million in revenues last year.
Before Cottonwood, in November 2018, Coinsource became the only licensed Bitcoin ATM operator. It was the first Bitcoin ATM operator to receive the Virtual Currency License. Currently, it operates as the world’s largest Bitcoin ATM operator. At the time NYDFS explained its decision to grant approval saying that it has conducted a comprehensive and thorough review of Coinsource’s application and subjects the firm to significant regulatory conditions.