Get Ready For The Next "Inside Job"!
New York bitcoin exchange itBit has closed $25m in Series A fundraising. Series A? That's refreshing actually, being so used to Coinbase, the many years in business "new" start-up company, and their continuous stream of Venture Capital, they'll be back on Series A.2 soon once they finish plowing through the alphabet.
The deal inked included the full cavity intrusion of new members of it's board of directors: former Federal Deposit Insurance Corporation chairperson Sheila Bair; former New Jersey Senator Bill Bradley; and former Financial Accounting Standards Board (FASB) chairman Robert Herz.
Now they'll get a nice big brother flashlight up the daily ass, but after watching the "Ripple Cripple", and the $700,000.00 spanking from FinCEN, there's little doubt this was going to be a key point of the deal. Actually, this is common among Series Funding, especially on the Series A, and it's not uncommon for a VC firm to take a large portion, if not over 50%, of the controlling interest.
itBit also revealed that it has received a trust company charter from the New York State Department of Financial Services (NYDFS). itBit is the first company of its kind to receive a trust company charter, according to the NYDFS,
The head itBit-er stated:
“Regulatory approval from the NYDFS allows us to serve as a custodian for our clients’ assets and expand our services to US customers – the largest market of bitcoin traders in the world – and allows us to do so with the highest standard of care afforded by any bitcoin company.”
With FDIC Insurance, customers who;s funds are stored with the organization will be protected, to prevent another "Gox-ing" [Mt. Gox].
The NYDFS revealed itBit applied for a charter under the agency’s digital currency business process in February of this year, getting a “rigorous review” of its compliance and cyber-security standards, which is another "No Shit", and I point again to the aforementioned Ripple [Ripple Labs, Inc. San Frasisco, CA],
Still No WinkleVoss Twins
Dudes? Hey....Dudes? ............ Dudes?
I can't help but point out the "twins" are not in the game yet. They seem to talk allot and announce allot of stuff, but nothing ever manages to come to fruition.
Due to the "review" and all of the above, itBit has emerges as a new regulated US bitcoin exchange, and we sure hear all of this yap about compliance, regulation, and fines, but we hear so very little about security, or responsibility and prevention of hiring potential "inside jobbers". You're not going to have to worry about very much Money Laundering if there;'s no Money to Launder with now will you? Maybe that's the secret plan?
“As a chartered limited purpose trust company with fiduciary powers under the banking law, itBit can begin operating immediately and is subject to ongoing supervision by the NYDFS.”
Superintendent Benjamin M Lawsky remarked in a statement that bitcoin and similar implementations “could ultimately hold real promise” as financial technologies, but added the statement that regulations are needed to protect customers.
Regulation Enforcement of Digital Currency
With FinCEN's demolition of Ripple earlier this week, it is apparent that, regardless of what anyone thinks, or states, the Enforcement Network, along with other U.S. Agencies, are seeing to it, that regulation is enforced.
In any case, there's plenty of room for another exchange, and considering the difficulty that still surrounds buying Bitcoin (even ATM's are a huge pain in the ass), there is still a large, and growing, market. As far as these individuals being the type to do things the regulatory way, not so sure. Even folks buying for legitimate reasons, with ID, and willing to fill out all the forms have difficulty. I know of at least 3 people who cannot buy from TruCoin, for example, because they don't have a utility bill in their name.
The interpretation and implementation of regulation by some companies, who go overboard, certainly takes the anonymity out of Bitcoin, but also make it a painful process and one easy to just walk away from, seriously, and that's not doing anyone any good.
Buying $100 to go lose on one of the many online casino establishments, does not need utility bills, six factor authentication, several forms of identification, email, phone number, photographs, signatures, and pictures of you in the burning bright sunlight holding your id up to your face like a dumb-ass. That would be a misinterpretation of the Bank Secrecy Act, and Anti-Money Laundering, but that's not really the reason for any of that (other than identification in certain cases, which is, required by law), that's just the excuse they use to dissect your identity in the event they need to hunt your ass down.
What it is, would be an organization hiding behind a regulatory excuse, because what they really want, is an easy to manage automated process (a computer program that does all the work) that helps protect themselves, and their profit, from getting scammed. That way they have to hire less people, do less work, and make more money.
Who can blame them, if you have millions of dollars in funding that you are blowing through like water on campfire, you've got to start turning a profit eventually, or at least make it look good enough to get another round, just ask Coinbase, their currently working on round 5.
Good luck to itBit, we'll be checking out the exchange soon, and provide our thoughts, on that note, and I'm not picking on Coinbase here (well not any more than usual), but we still cannot access that exchange. Perhaps itBit is the answer to fill the gaps where Coinbase cannot. We shall see,