Thursday, May 7, 2015

OMG Bitccoin Goes Total Crony Capitalist

New York State’s top financial regulator has granted the first license to a Bitcoin exchange, allowing it to open legally to customers across the country, reports NYT.

The exchange, itBit, said on Thursday morning that it was beginning to take on customers in the United States immediately after receiving a banking trust charter from New York State’s Department of Financial Services and its superintendent, Benjamin M. Lawsky.

So how did  itBit get clearance?

According to its web site:
itBit has taken a uniquely rigorous approach to regulatory compliance by establishing the itBit Trust Company, overseen by the New York State Department of Financial Services.
This means that they will likely file even more financial information with government authorities about the users than even Coinbase.

itBit list as part of its "mission:
 One of itBit’s core principles is establishing and maintaining regulatory compliance within all jurisdictions we operate--a key point of differentiation from our competition. itBit’s stringent Anti-Money Laundering/Know Your Customer (AML/KYC) program ensures that clients trade in a trusted environment. 
And just to make clear this is about the crony establishment itBit also announced that Sheila C. Bair, the former chairwoman of the Federal Deposit Insurance Corporation; Bill Bradley, the former New Jersey senator; and Robert H. Herz, a Morgan Stanley director and former Chairman of Financial Accounting Standards Board,  have been appointed to itBit's board.

Charles Cascarilla, CEO and Co-Founder, was once an analyst at Goldman Scahs.

As part of its "team," the company list two heavy duty compliance officers.

Erik Wilgenhof Plante is the Chief Compliance Officer of itBit. Previously, he was a Senior Compliance Manager at PayPal. He is a founding board member of the Singapore chapter of the Association of Certified Anti-Money Laundering Specialists.

Gabriel (Gabe) I. Hidalgo is a Senior Vice President of Compliance. He has held senior compliance roles with the Federal Reserve Bank of New York, Morgan Stanley, Capital One Bank and Deloitte. While at the Federal Reserve Bank of New York, Gabe trained regulators from the Federal Reserve System, NCUA, FDIC, SEC and state regulatory agencies on AML compliance examination techniques.

Attention libertarian bitcoin fanboys, itBit just threw up on your dream of Bitcoin being some kind of freedom currency,



  1. OK, but does this affect Bitcoin users who DON'T go through itBit?

  2. It's not really a surprise that the establishment is going to buy into bitcoin. Compared to what they're selling, it's superior technology. But anyone can have an exchange. Banksters could even spin off their own fascist-coin. Anyone else can elect to use bitcoin, or anothercoin, instead. OMG it's anarchy! Hey, we can see the code.

  3. This is the beginning of the switch to electronic currency and the of paper.

  4. Blythe Masters entered the picture in March and an air of limitless control followed in her wake, as she has a history of mastering all she surveys, and today it is Bitcoin. This is simply a short stop over for Blythe as she will most likely soon be off to put in tighter controls for a quickly evolving cashless society. When this woman enters the picture it is time to leave that market.

  5. Equating this company with Bitcoin is like equating GM with the internal combustion engine.

    1. That's a truly perfect analogy. "Bitcoin Goes Total Crony Capitalist" is a very misleading title, and the angle of this piece is pretty misled. Governments regulate all types of things, and we don't label those things as "Crony Capitalism" just because they purveyors of those goods are complying with regulations and getting into bed with the State. If Ben Bernanke opened a pawn shop and started buying and selling gold coins, we wouldn't be blaming the gold.