New York gives regulatory green light to blockchain-focused asset manager

WisdomTree has gained clearance to offer its “blockchain-enabled” financial app to New York users via a charter expected to also extend its digital assets offerings more broadly.

The New York State Department of Financial Services (DFS) cleared the fund group — managing $106 billion in assets — to operate as a limited purpose trust company under the state’s banking law, WisdomTree said Friday.

The charter allows the firm to custody digital assets, as well as issue, exchange and manage the reserves of DFS-approved stablecoins. The newly formed WisdomTree Digital Trust Company intends to issue its gold and dollar tokens and maintain reserves for those assets, the company noted.

The company is also set to make its WisdomTree Prime app available to New York customers in the coming weeks, the firm said in a news release.

The app, which launched in 21 states in July, offers bitcoin and ether, as well as dollar and gold tokens. It also allows users to access digital funds that have share ownership records kept on the Stellar or Ethereum blockchains.

Will Peck, WisdomTree’s head of digital assets, is now also the CEO of WisdomTree Digital Trust Company.

The charter sets up a roadmap to offer products, such as DFS-approved stablecoins, on public blockchains outside of WisdomTree Prime, Peck told Blockworks.

“We believe long-term legislative and regulatory trends are likely to favor or require the use of highly regulated organizations, like New York limited purpose trust companies, for issuing tokenized products and providing related services,” he added.

The latest regulatory clearance comes after WisdomTree executives have reiterated their vision to bring fixed income, equities and commodities into the digital world via digital funds and tokenized exposures.

WisdomTree Prime’s tech stack integrates software from DTCC Digital Assets and Fireblocks’ Multi-Party Computation (MPC) wallet technology for security related to private keys management.

“Crypto’s interesting, but the real opportunity is blockchain-enabled finance,” Chief Operating Officer Jarrett Lilien said during an October 2022 earnings call. “It’s a mistake to confuse crypto, which is a use case for the blockchain…with the broader opportunity we’re pursuing.”

WisdomTree launched one of the 10 US spot bitcoin ETFs cleared to start trading in January.

“We have no plans to incorporate the trust company into our ETF franchise,” Peck told Blockworks on Friday. “But over time, we plan to use the WisdomTree Digital Trust Company to offer products and services to institutions and business customers.”

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.