Tagomi Trading, LLC, is the latest firm to receive the highly sought after green light from the Department of Financial Services. The New Jersey firm went through seven months of applications first.
Tagomi CEO and former Goldman Sachs executive Greg Tusar commented on the regulatory approval, saying Tagomi was eager to get started.
The executive said:
The number of clients that opens up in New York is quite a substantial opportunity. We definitely have a backlog of clients that we would like to onboard that we were waiting for this approval to move forward with.
The firm operates by taking trader orders and searching for the lowest price across multiple exchanges. Tagomi will also add margin trading, shorting, and lending features to the platform. Supported currencies include Bitcoin, Ethereum, Bitcoin Cash, and Litecoin - the firm has approval for additional currencies also.
Tagomi raised a total of $27.5 million from a number of investors including Pantera Capital, Peter Thiel Founders' Fund, and BitOoda. BitOoda discussed the investment with CCN.
In statements to CCN, BitOoda said:
BitOoda has worked very closely with Tagomi over the past year and has tremendous respect for Greg, Jenn, Marc, and the rest of the team. We’re excited to see their hard work paying off and regulators recognizing the need for these institutional-quality solutions.
The NYDFS approval is significant because it grants Tagomi access to New York-based financial institutions and funds.
The BitOoda team also stated that Tagomi aggregates liquidity across OTC markets as well as exchanges for a tight spread.
Describing the NYDFS regulators to be "open-minded and inquisitive", BitOoda voiced the firm's support for regulation. The team added that lack of transparency and regulation only hinders adoption.
A major obstacle preventing greater cryptocurrency adoption is the lack of a fair, transparent, and secure marketplace for larger players. Firms like Tagomi and BitOoda are mitigating the market issues on a daily basis by offering client-focused agency services and acting as regulated entities, while firms such as BitGo and Fidelity are building institutional trust on the custody side.
Q: How hard is it to receive a New York BitLicense?
FACT: Of the hundreds of applications received over 7 years, only 14 were approved. Krakken gave up. UpHold is still 'pending'.
One of the first to receive a license? Ripple Labs subsidiary, XRP II.
BELIEVE 🚀🚀🚀 pic.twitter.com/BwTiObxT5c
— Cryptopolis (@cryptopolis_x) February 12, 2019
The NY BitLicense has come under fire for being overly restrictive in the past, with Kraken and ShapeShift exchanges both leaving New York to escape the regulations. The latest such license is the 18th overall awarded by regulator.
ShapeShift has spoken with CCN on harsh US regulation in the past. Kraken CEO Jesse Powell made caustic remarks comparing New York regulators to an abusive ex. However, while restrictive, the BitLicense remains coveted, a must-have for firms wishing to trade cryptocurrencies in the financial hub of New York where Wall Street is based.
Robinhood and LibertyX received the BitLicense earlier this year. Robinhood described regulators as very helpful, confirming plans to launch further initiatives in New York this year.