The cryptocurrency Stellar Lumens has been approved by New York financial regulators to trade on the itBit exchange. This is the first time the crypto has been approved by the state authorities.
ItBit is a cryptocurrency platform created specifically for institutional investors. It has only been offering Bitcoin trading on its platform. However, it was also granted approval by the New York’s Department of Financial Services to include Bitcoin Cash, Ethereum, and Litecoin to its exchange.
ItBit operates the second largest US bitcoin exchange by total volume. The exchange made the announcement on Thursday that in addition to the NYDFS approving its request to list the three assets, it also approved it to list Stellar’s lumens coin.
Banking Law Charter
NYDFS granted itBit a banking law charter three years ago. The exchange became the first in the industry to be granted the charter, which is superior to the BitLicense. Thus, the exchange operates an over-the-counter (OTC) trading desk and provides investors with custodial services at the same time running its cryptocurrency exchange.
Xapo, another bitcoin trading service and wallet, was also concurrently granted a BitLicense by the New York Department of Financial Services. The company is known for Bitcoin storage in an underground vault in the Swiss Alps. This makes it only the sixth company to be awarded the certification since the BitLicense was introduced.
Not A Security
With a market capitalization of more than $4.3 billion, Stellar Lumens is currently the seventh most valuable cryptocurrency. Its approval confirms that regulators do not see the virtual currency as a security, meaning it does not have to register as a broker-dealer with the U.S Securities and Exchange Commission.
Chad Cascarilla, CEO of Paxos, which owns itBit stated that this is the reason they added them to the exchange. He further stated that if they were a security they would have gone through a different process.
This approval potentially opens the way for more exchanges to list Lumens. If that were to happen then it would help influence the cryptocurrency’s price. USA’s leading crypto exchange Coinbase announced recently that it plans to add Ethereum Classic to its four existing offerings.
Stellar’s blockchain technology is used by companies to send payments between countries in the South Pacific region. Such companies as Startup Kik and IBM are known to use it.