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New York Grants BitLicense, Money Transmitter License To SoFi

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The New York Department of Financial Services (NYDFS) granted BitLicense, the license of virtual currency activities, and money transmitter license to crypto trading firm SoFi Digital Assets, LLC, a wholly owned subsidiary of Social Finance, Inc.

The two licenses will allow the company to facilitate buying and selling of cryptocurrencies such as Bitcoin and Ethereum to consumers in the State of New York. The company is currently authorized to support trading in Bitcoin, Bitcoin Cash, Ether, Ether Classic, LiteCoin, and Stellar Lumens.

SoFi had announced earlier in the year that it offers both automated (robo-advising) and active investing (trading) with no fees on stock trading or account minimums. The platform enables trading in stocks, ETFs and crypto through a single app.

The NYDFS ensures companies adhere to high standards of consumer protection, security, and fraud-prevention.

The controversial BitLicense regulatory framework, which came into effect on August 8, 2015, is aimed at monitoring and regulating operations of cryptocurrencies such as Bitcoin and cryptocurrency-related products being offered in the State of New York and to New York residents.

Since 2015, the New York regulator has granted 24 virtual currency licenses or trust charters, including the virtual currency license of SoFi Digital Assets. It granted the first BitLicense to industry startup Circle in September 2015.

BitLicense is dubbed as one of the most restrictive cryptocurrency regulatory frameworks in North America. More than fifteen digital currency companies left the New York state because of the new regulations, including Vaultoro, Shapeshift, Paxful, Poloniex, Bitfinex, Kraken, and more. This was called 'Great Bitcoin Exodus.'

In July, the NYDFS established a new division, which will be responsible for licensing and supervising virtual currencies and related businesses. The division will also be responsible in granting BitLicense to businesses to provide virtual currency services for customers across the State of New York.

The new Research and Innovation Division will support the DFS in internal transformation and market innovation to help keep pace with the rapid changes in all sectors of the financial services industry.

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