Crypto custody company BitGo has filed a formal application with the New York State Department of Financial Services (NYDFS) for a Trust Charter to operate as an “independent, regulated qualified custodian” under the state’s banking law, according to an announcement published today.
“With this charter, BitGo will meet the strong demand by the world’s leading institutional investors based in New York, who are seeking to secure large amounts of digital assets with the highest level of security, regulatory oversight and operational efficiency,” said the announcement.
According to BitGo, the company “is expecting a dramatic increase in market demand for its products and services from banks, pension funds, hedge funds and other fiduciaries” after the Office of the Comptroller of the Currency (OCC) issued its guidance recently, allowing banks to hold cryptocurrencies.
If its application is approved, BitGo New York Trust plans to offer its clients services such as regulatory oversight from NYSDFS, KYC/AML compliance, cold cryptocurrency storages, multi-signature cryptographic technology and others.
As Decrypt reported, the OCC, an independent bureau within the US Treasury, issued a public letter in July, clarifying that national banks and federal savings associations have the legal right to take custody of cryptocurrency assets.
Still, according to some experts, it doesn’t necessarily mean that banks will replace crypto custodians, although the latter may very well be incentivized to step up their regulatory compliance game.