Crypto exchange BitFlyer now serves Hawaii via regulatory sandbox

BitFlyer USA, the U.S. arm of the Japanese crypto exchange, is now servicing Hawaii residents.

The exchange has 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.

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. 

With Hawaii, BitFlyer USA now operates in 48 states and territories, excluding West Virginia, Connecticut and Nevada, a spokesperson of the exchange told The Block. California, New York, Texas, Florida and Washington are the top five states by trading volumes, the spokesperson added. They declined to share the customer base.

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