Bitcoin Exchange Gemini Leverages Banking Charter in Washington State Launch

The New York State Department of Financial Services (NYDFS) has granted Gemini Trust, a New York-licensed bitcoin and ethereum exchange service, permission to serve customers in Washington State.

Maria T Vullo, the NYDFS superintendent, said in a statement that the approval was the result of a collaboration between her agency and the Conference of State Bank Supervisors – a nationwide institution that supervises state-chartered financial institutions.

Gemini is now operating in most US states, with the exception of Alaska, Arizona, Hawaii, Oregon and Wisconsin.

Key to Gemini’s permission to serve Washington was its trust charter, granted in New York in 2015.  On application, the exchange’s founders, investors Cameron and Tyler Winklevoss, preferred that option to the state’s ‘BitLicense’, arguing it allowed a wider scope of businesses to be served.

The exchange was following in the footsteps of itBit (now Paxos) – the first digital currency firm to seek a charter in the state. At the time, the startup made the argument that a charter would enable it to offer services in more states without applying for licenses state by state.

The approval comes two months after Washington passed Senate Bill 5031, which requires some digital currency businesses to comply with the state money transmitter laws and exchanges to obtain licenses.

The new rules will become effective from 23rd July, 2017.

While a small update, the decision has potentially major implications for cryptocurrency startups that may be classed as money services businesses or money transmitters.

In response to the passage of the bill, Gemini competitors including Poloniex and Bitfinex announced they would no longer do business with customers residing in Washington.

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Paxos.

Washington flag image via Shutterstock