Crypto Markets & Technology: For starters, can you briefly introduce itBit and how it fits in to the bitcoin trading landscape?
Bobby Cho: Launched in November 2013, itBit is a growing global bitcoin exchange headquartered in New York with international offices in Singapore and Shanghai. Our mission has been to create an exchange unlike any other, one that operates at the same level of sophistication as traditional financial exchanges.
As such, itBit is 100% compliant in every jurisdiction we operate. But even more importantly, we set the bar for the highest standards of customer protection and best-in-class service. itBit is powerful enough to trade large volumes, protected by bank-level security, powered by state-of-the-art technology and has a global presence that allows us to be available 24/7. We currently operate three different currency pairs versus bitcoin (USD, EUR, and SGD).
Our team believes in the value and power of bitcoin and brings a wealth of experience in traditional financial services, financial technology and compliance.
CM&T: How is itBit differentiating itself from other exchanges? Are there any strategic decisions you have made re. positioning of itBit versus other liquidity pools?
BC: itBit’s core founding principal is establishing proper regulatory compliance in all of the locations our exchanges operates. This emphasis on exceeding current industry compliance standards separates us from the competition.
itBit utilizes a proprietary AML/KYC program, overseen by our experienced Chief Compliance Officer, Erik Wilgenhof Plante, that incorporates the use of bank-grade compliance software and systems to continuously monitor our activities. itBit continues to be committed to offering bank-level security to ensure that our customers receive the highest degree of protection and service. Our clients can feel assured that they are transacting in an environment where every participant is properly verified and compliantly vetted.
CM&T: Unlike some other exchanges, you have decided not to introduce margin trading - at least for now. Wouldn't this help to boost liquidity on itBit? What's your reason for not going in this direction?
BC: In general, I don't believe margin trading will always equal a boost of liquidity. For years, financial services firms have focused on providing their clients with the appropriate knowledge base when considering margin trading and only providing this service to qualified individuals/firms. Further, here in the U.S., firms offering margin against financial securities are required to comply with regulation T and U, which are governed by the Federal Reserve.
itBit has built a compliant exchange that focuses heavily on risk management and security. We certainly hope to expand our services in the future; however, we first want to perform our due diligence to ensure we're providing our clients with the appropriate investing tools.
CM&T: Can you say some more about itBit's compliance programs and how they are implemented? What kinds of checks are in place, and how similar to compliance in the mainstream financial markets are your procedures?
BC: Our AML/KYC program is fully compliant with regulations and law enforcement agencies around the world, including Singapore, an FATF Member Country. Before any user may trade, our compliance department performs in-depth KYC procedures utilizing a number of ID verification platforms. Further, we conduct independent annual AML audits and risk assessments.
CM&T: Given your emphasis on risk management and compliance, how would you say itBit stacks up against the operating requirements stated in the proposed New York BitLicense regulation?
BC: We have every intention to be fully compliant with the final BitLicense guidelines and expect this will be achievable. Risk management and compliance have been a top priority for us since inception. Our compliance processes and programs continue to exceed industry standards within the digital currency exchange space. When the BitLicense regulation is finalized, we stand ready to make all the necessary adjustments to be fully compliant.
CM&T: Assuming BitLicense becomes regulation - in a workable form - how do you expect its existence to help bring financial institutions into the world of bitcoin trading and investment?
BC: One of the key factors financial institutions take into consideration before entering a new market is clarity and a deep understanding of rules and regulations. BitLicenses would help build the legitimacy of bitcoin in the eyes of financial institutions and foster trust in the young industry.