The cryptocurrency exchange ItBit submitted an application for a New York State banking license. If approved, ItBit would become the first Bitcoin company to gain legal recognition as a bank. Reuters
The cryptocurrency exchange ItBit submitted an application for a New York State banking license. If approved, ItBit would become the first Bitcoin company to gain legal recognition as a bank. Reuters reported the filing based on information from the New York Banking Authority; ItBit itself did not confirm the filing to CoinDesk.
The irony is rich. Many people entered Bitcoin specifically to escape traditional banking. Now one of the industry's most prominent companies is trying to become a bank.
Reuters stakes its reputation on verified information. The fact that the news service reported this filing—naming specific authorities as its source—suggests ItBit's application is genuine. For the exchange, the regulatory approval carries genuine weight. Bitcoin's early history is filled with collapses, thefts, and fraud schemes. Investors have watched exchanges steal user funds and vanish overnight. A New York banking license would provide institutional credibility and reassure investors who remember these losses.
This regulatory approval contradicts the premise that drew many early Bitcoin users. These people wanted alternatives to traditional finance, not a company that would become one.
Rand Paul is working to attract Bitcoin donations and voters to his presidential campaign. He became the first major U.S. presidential candidate to accept Bitcoin contributions. At a private Bitcoin event in New York, Paul commented on cryptocurrency regulation, according to reporting by newsbtc. His campaign has not released a transcript of his remarks from that event.
The decision to keep his speech private raises questions. Paul may be tailoring his message depending on his audience. He wants Bitcoin donations flowing toward his campaign. His political establishment connections matter, though. Three of Paul's top ten financial backers work in traditional banking and finance. Impala Asset Management ranks seventh, Corriente Advisors ranks sixth, and Mason Capital Management ranks second among his contributors. Paul appears to be testing the waters, trying to measure how much capital Bitcoin donors will give before he informs his banking industry backers that he champions a technology that could make their business models obsolete.
The Bitcoin Foundation announced a significant shift in its strategic direction. Brock Pierce took control of the board, and Bruce Fenton assumed the role of executive director, with Patrick Murck departing from his position. Fenton stated that the Foundation would not be "working to directly fund core development" in the near future.
Core protocol development has been a central focus of the Foundation since its inception. The technical team developing Bitcoin's core code relocated to Massachusetts to accept positions with MIT's Digital Currency Initiative. Both Fenton and Murck backed the decision to move development funding away from the Foundation. The Foundation lacked the financial resources to sustain major commitments to development work.
With the leadership finally in place and core development no longer its responsibility, the Foundation faces two critical tasks. It must decide what goals it will pursue going forward, and it must persuade donors that those new directions deserve contributions.
