Institutional crypto custodian Fireblocks has received a license from New York's regulator

What’s new? Web 3.0 infrastructure provider Fireblocks has been authorized by the New York State Department of Financial Services (NYDFS) to provide cryptocurrency cold storage services. Fireblocks announced its intention to launch a custodial regulated company in the state back in May.

Material by Cointelegraph

What else is known? The Fireblocks initiative is part of a broader plan to create a global network of regulated crypto custodians, which was launched in June. Asset custody units are also being launched in the UAE, UK, Singapore, Thailand and Australia.

The NYDFS-regulated company is focused on meeting the growing demand for cryptocurrency custody from institutional market participants such as investment advisors, asset managers and exchange-traded fund (ETF) issuers.

Earlier, NYDFS permission to store crypto assets was granted to centralized crypto exchange (CEX) Coinbase, investment firm Fidelity and payment giant PayPal.

Obtaining permission to launch a limited liability trust company is an alternative to the BitLicense licensing regime with more restrictive conditions. In the former, the company can exercise fiduciary powers, such as custody of assets, and money transfers without the need for a separate money transfer license in the state.

The BitLicense is a business license for firms wishing to engage in cryptocurrency activities in New York. Due to strict requirements, only a small number of companies have been able to obtain it. Back in 2022, billionaire investor Bill Ackman criticized the BitLicense as it represents “an onerous obstacle that limits innovation.”

The BitLicense license is held, among others, by the fintech company Ripple, which developed the payment protocol of the same name and the XRP token with a capitalization of $31,7 billion (seventh in the ranking of cryptocurrencies).

What is known about Fireblocks? Launched in 2018, the company offers institutional investors a platform for safe storage of funds, access to DeFi services, and the ability to stake crypto assets. The company received investment from Google's parent company, Alphabet.

The founders and top executives are Michael Shaulov, Pavel Berengoltz and Idan Ofrat. Shaulov, as CEO in 2023, joined the Technology Advisory Committee of the US Commodity Futures Trading Commission (CFTC).

In 2022, Forbes named it to its Fintech 50 list of the most innovative private financial technology companies, and in 2023, it was named one of the top 10 largest fintech companies in the United States.

Also in 2022, France's largest bank holding BNP Paribas and the oldest US bank BNY Mellon signed an agreement with Fireblocks, and Israel's Ministry of Finance and the Tel Aviv Stock Exchange (TASE) included Fireblocks among the participants in a project to test blockchain bonds.

Last September, Fireblocks launched its own non-custodial Web 3.0 cryptocurrency wallet for decentralized financial apps.

Since November, Fireblocks has been custodian of Libeara, an asset tokenization platform from Standard Chartered's SC Ventures unit. In December, Standard Chartered's custodial unit Zodia Custody launched Interchange Connect, which allows institutional investors to transfer funds between Fireblocks, Ripple's Metaco and Copper's ClearLoop custodian accounts, as well as make over-the-counter (OTC) transactions.