A dozen crypto firms can now operate in Hawaii via regulatory sandbox

Exchanges • August 19, 2020, 4:00PM EDT
UPDATED: August 19, 2020, 4:32PM EDT
W. Scott McGill/ shutterstock.com

Twelve cryptocurrency firms including ErisX, bitFlyer USA, and Gemini are now servicing Hawaii residents.

The firms have been approved by the state’s regulatory sandbox called Digital Currency Innovation Lab — the initiative between the Hawaii Department of Financial Institutions and Hawaii Technology Development Corporation (HTDC), an agency for the State of Hawaii.

The sandbox program was launched in March of this year and allows crypto firms to apply for approval to do business in Hawaii without obtaining a state money transmitter license for two years.

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Hawaii previously had more restrictive crypto licensing regimes compared to some states. In 2017, the Hawaii Division of Financial Institutions asked crypto exchanges to hold cash reserves equal to crypto-denominated funds held for its customers. This "bad" policy led Coinbase to stop serving in Hawaii, and today the exchange remains unavailable in the state.

Binance.US also doesn’t serve Hawaii, according to its website. BitFlyer USA said the sandbox initiative marks the return of crypto exchanges to Hawaii and could result in exchanges receiving full licenses in the future. 

Editor's Note: This story has been updated to include additional firms that have been approved by Hawaii's regulatory sandbox

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Yogita Khatri is a senior reporter at The Block, covering all things crypto. As one of the earliest team members, Yogita has played a pivotal role in breaking numerous stories, exclusives and scoops. With nearly 3,000 articles under her belt, Yogita holds the records as The Block's most-published and most-read author of all time. Prior to joining The Block, Yogita worked at crypto publication CoinDesk and The Economic Times, where she wrote on personal finance. To contact her, email: [email protected]. For her latest work, follow her on X @Yogita_Khatri5.

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