The UK-based cryptocurrency exchange center, CEX.io, has joined Silvergate Exchange Network (SEN), the payment rail connecting major customers of Silvergate, the bank's benchmark. crypto space.
In an interview with CoinDesk, Steve Gregory, Chief Operating Officer and Global Compliance Director of CEX.io for its US subsidiary, called Silvergate "the absolute benchmark" for cryptographic compliance in the United States. institutional crypto club.
By participating in SEN, CEX.io is directly connected to major institutional cryptographic players such as Coinbase Prime, Cumberland, Kraken OTC, BitStamp, Jump and Circle, to name a few.
CEX.io, which began offering services to US customers in 2015, has its headquarters in Jersey City, New Jersey, and holds some 17 state licensess make his exchange work. The company has 250 employees and operates in 180 countries.
Gregory was previously head of compliance at Gemini, the New York Department of Financial Services (NYDFS) -exchange founded by Tyler and Cameron Winklevoss, who also recently joined SEN.
He told CoinDesk:
"We are in the club now. Silvergate is the largest bank in the industry and with SEN and we can facilitate transactions with some of these larger member institutions. "
SEN provides Silvergate's large institutional clients with an instant payment network 24 hours a day, seven days a week. This means that if a proprietary trading house such as Cumberland, for example, wants to transfer a few million dollars to CEX.io this can be done without using a bank transfer.
Silvergate's internal online banking services use an API to instantly transfer funds to an internal ledger. "Instead of making a wire transfer, then a wall-to-wall transaction, we can simply ask Silvergate to move our balance into USD," Gregory said.
Although there is no accurate data on the number of companies listed in the SEN and regularly using its internal payment train (Silvergate is currently in an IPO latency period and is unable to comment), the users of the service claim that the number of transactions is important.
Removing the counterparty risk of over-the-counter cryptographic transactions and allowing them to remain active is a good idea, which is also under consideration. BitGo tastes and the OTC Genesis, as well as Kingdom Trust and the trading company OTCXN.
There is a short list of banks that manage cryptographic companies. CEX.io US also recently became a client of Nevada's licensed trust company Prime Trust, which now provides banking and banking relationships for Binance. Signature Bank is another popular encryption bank, with which CEX has worked.
"Signature Bank has been great with us and has always been efficient and transparent, "Gregory said. "Unfortunately, Signature can not process retail transfers and ACH transfers under $ 50,000 without consolidating batch transactions."
On the basis of this limitation, he stated that CEX.io "will use Silvergate for ACH deposits and withdrawals and for retail transfers of less than US $ 50,000".
In addition to the approximately 16 US states that do not require a license, CEX.io has acquired licenses to operate in the following countries: Alaska, Florida, Georgia, Iowa, Kansas, Maryland, New Hampshire, New Jersey, New Mexico, Oklahoma, Oregon, Rhode Island, South Dakota, Vermont and West Virginia.
The company filed a BitLicense license application in the spring and held its first meetings with the NYDFS, Gregory said. A spokesman for CEX.io added that the planned approval would be "in a few months, from the NYDFS, which administers the Bitlicense and New York Money Transmitter licenses."
Speaking about the "high barrier to entry" when setting up a store in the United States, Gregory pointed out that the installation Guarantees to be able to operate in each state is expensive, especially while waiting for a license application examined, concluding:
"It's hard to disrupt some of the biggest trade that's already established."
Image: Alex Kravets, CEO of the American subsidiary of CEX.io, courtesy of the company