New York Widens Digital Currency Marketplace; Licenses Trust Company

Editorial Staff

19 August 2019

Bakkt Trust Co LLC has been granted a license to operate as a limited liability trust company, the New York State Department of Financial Services announced last Friday.

Bakkt is a cryptocurrency platform affiliate of Intercontinental Exchange, which also owns the New York Stock Exchange.

The announcement is an example of how cryptocurrencies such as Bitcoin, while controversial, continue to attract interest and, as a result, investment and industry entrants, including exchanges and various intermediaries.

According to one definition, a limited purpose trust company is a trust company that has been chartered by the state to perform specific trust functions. These functions can include acting as a depositor or safe-keeper for securities or mortgages.

DFS has authorized Bakkt to provide custody services for Bitcoin in conjunction with the launch of physically delivered Bitcoin futures contracts. Bakkt will serve institutional customers; its Bitcoin futures contracts will be listed for trading on Intercontinental Exchange Futures US and cleared through ICE Clear US. Both entities are affiliates of Bakkt.

To date, DFS has approved 22 charters or licenses for companies in the virtual currency marketplace.

DFS said it became the first state or federal agency in the United States to supervise virtual currency with the promulgation of its landmark regulation in 2015.