Earlier this week, we hosted our first Reddit AMA. Given the ongoing interest and inquiry into our trust company charter, this was the perfect way to directly address the Bitcoin community. The AMA lasted over two hours and the itBit team fielded over 40 questions.
We appreciate the great response from the community and thank you all for your honest and insightful questions, comments and feedback!
Three Popular Questions
In the AMA, we addressed some key points of confusion regarding our trust charter as well as general misconceptions about itBit. Below are three of the more popular AMA questions and our responses (some questions have been shortened).
Q: Why did NYDFS choose your organization for the charter over others?
From Reddit user btcboomer321
A: To clarify, NYDFS did not “choose” our organization over others. We applied for our Trust license, which is available to any institution willing to go through the rigorous application process.
Early on, we decided to only open our exchange in the US if we could service all US customers nationwide in a fully regulated and compliant manner. Our Trust charter allows us to do so.
Other bitcoin companies can apply for the same license – the process doesn’t exist solely for us. We simply opted for this approach because it fit with our overall mission to service our customers in the best way possible. Other exchanges & clearinghouses operate this way: The most prominent examples are the Intercontinental Exchange (ICE), one of the world's largest exchanges which operates ICE US Trust and the Depository Trust & Clearing Corporation (DTCC).
Q: What questions do you think we should ask you and every other bitcoin exchange that may not be obvious?
From Reddit user SeriousCity
A: Here are a few questions we’ve seen floating around that we think all exchanges should be answering:
- Do you follow the applicable money transmitter or banking laws in the jurisdictions in which you operate?
- Does your exchange have the ability to custody?
- Does your exchange have dedicated capital reserves?
- Does your exchange adhere to the CryptoCurrency Security Standard?
Q: Do you provide any sort of proof of reserves or transparency page to show customers you are solvent? If no, do you plan on it in the future?
From Reddit user BitcoinXio
A: We do not offer this. Currently, we are being regulated by the NYDFS who conducts periodic reviews of our financial state as well as our safety and soundness. As part of the regulatory oversight, the NYDFS stipulates the amount of capital reserve that we have in order to preserve the solvency of customer funds within our trust platform. These reserves are a percentage of our total client’s assets and are maintained in cash & bitcoin and are marked to market on a daily basis.
Thanks for all of the great questions! If you have any additional questions, comments or feedback for our team, please shoot us an email at email@example.com.