Tagomi CEO, Greg Tusar commented on the matter:
“The number of clients that opens up in New York is quite a substantial opportunity. We definitely have a backlog of clients that we would like to onboard that we were waiting for this approval to move forward with.”
Considering that most hedge funds regulated by the SEC cannot invest on behalf of their clients because Bitcoin is not seen as a security, the industry hopes that this opens doors for institutional investors to reliably gain exposure to the cryptocurrency markets.
Tagomi currently supports Bitcoin, Ethereum Litecoin, and Bitcoin Cash and has approved other cryptocurrencies as well. Additionally, they plan to add functionality for margin trading, shorting, and lending, while aggregating liquidity from OTC markets.
One of their investors, in particular, BitOoda, commented to CCN.com further pressing the advantage to institutional investors:
“BitOoda has worked very closely with Tagomi over the past year and has tremendous respect for Greg, Jenn, Marc, and the rest of the team. We’re excited to see their hard work paying off and regulators recognizing the need for these institutional-quality solutions. The NYDFS approval is significant because it grants Tagomi access to New York-based financial institutions and funds.”
The BitLicense is very difficult to attain, requiring lots of paperwork, surety bonds, funds, and legal assistance. Both Shapeshift and Kraken have spoken out against the BitLicense in the past, mentioning that it inhibits innovation and will leave the state of New York behind during this blockchain discovery phase. New York residents are generally not free to use most exchanges, as a large majority do not have the BitLicense, and are thus, not regulated to operate in New York.
Some firms who were granted the BitLicense are Genesis Global Trading, Coinbase, Bitflyer, Ripple, Xapo, Circle (Poloniex), Square Inc, and Robinhood. As our research tells, this is it. There are under 10 firms that have been granted the New York Bitlicense.
BitOoda even announced their opinion about virtual currency regulation by saying:
“A major obstacle preventing greater cryptocurrency adoption is the lack of a fair, transparent, and secure marketplace for larger players. Firms like Tagomi and BitOoda are mitigating the market issues on a daily basis by offering client-focused agency services and acting as regulated entities, while firms such as BitGo and Fidelity are building institutional trust on the custody side.”