Bitcoin ATM Operator Cottonwood Receives NY BitLicense

Cottonwood Vending LLC, a US-based operator of Bitcoin ATMs, has received a coveted license to deal in Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term in New York.

Cottonwood was granted a so-called BitLicense by the New York State Department of Financial Services (NYDFS), becoming the second in its field to receive the highly-sought-after approval. Cottonwood joins only 20 other companies in the cryptocurrency space that were granted this license, which allows it to legally operate as a money transmitter and digital currency exchange.

In November 2018, Coinsource, the world’s largest Bitcoin ATM operator, became the first Bitcoin ATM operator to receive the Virtual Currency License.

To maintain a BitLicense license, a provider must fulfill various reporting requirements and comply with standards on anti-money laundering, cybersecurity, and consumer protection. And for an ATM operator, it should assure regulators that the company's systems in place ensure its machines aren’t being used for criminal purposes, including having a repository of transaction records.

Complicated regulatory structure

While US authorities have been relatively active on the subject of cryptocurrencies, the local community has had its ears filled with conflicting talk from different regulators and various state legislatures.

New York is the only state that requires firms dealing in digital assets to obtain a license to operate. The Empire State has established a strong state-based Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term, but the approach has been widely maligned by the crypto community for being one of the strictest laws governing this type of business.

The news follows other, similar stories of progress for Bitcoin companies in the US, though cryptocurrency regulation still happens largely on a state-by-state basis.

Cottonwood provides the largest bitcoin ATM network in New York, now operating nearly 100 machines, which allow the city residents to buy and sell the cryptocurrency for cash. Its recent regulatory filings show it has generated $35 million in revenues last year.