Tagomi, an institutional investor-focused crypto brokerage backed by Peter Thiel, received approval to do business in New York on Wednesday with a BitLicense from the Department of Financial Services.
Following a roughly seven months-long application process, the New Jersey-based firm will now be able to work with institutional clients based in the world’s financial center—making it the 18th company to receive a BitLicense, a permit which allows companies to buy and sell virtual currency for customers in New York.
“The number of clients that opens up in New York is quite a substantial opportunity,” said Greg Tusar, Tagomi’s co-founder and CEO, who was formerly global head of electronic trading at Goldman Sachs. “We definitely have a backlog of clients that we would like to onboard that we were waiting for this approval to move forward with.”
Due to the disparate pricing across cryptocurrency exchanges, Tagomi takes trade orders and places them across several exchanges in search of the lowest prices. The brokerage recently raised $12 million that it plans to use to add new features such as margin trading, lending, and shorting. In total, Tagomi has raised $27.5 million from Paradigm, Pantera Capital, and Peter Thiel’s Founders Fund.
In order to secure the virtual currency permit, as well as a money transmission license, Tagomi faced DFS questions about cybersecurity and its anti-money laundering practices.
With the new BitLicense, the firm has chosen to trade with Bitcoin, Ethereum, Bitcoin Cash, and Litecoin in New York—though the DFS has given the firm approval to trade additional cryptocurrencies as well.
“The Department’s approval of Tagomi’s virtual currency and money transmitter licenses provides consumers with more choice and more protection in a continuously evolving global financial services marketplace,” DFS Acting Superintendent Linda Lacewell said in a statement.