Crypto glossary
BitLicense
The BitLicense is New York State's licence for virtual currency businesses, issued by the Department of Financial Services under rules in force since 2015.
New York's Department of Financial Services (NYDFS) finalised its virtual currency regulation, 23 NYCRR Part 200, in 2015. Any firm that conducts virtual currency business activity involving New York or its residents, such as transmitting, storing, buying and selling crypto as a service or issuing a virtual currency, needs a BitLicense or must operate as a New York limited purpose trust company, another route the NYDFS offers.
Licensees face extensive requirements: capital set by the regulator, AML and sanctions programmes, a cybersecurity programme, consumer disclosures, custody rules, books and records, and prior approval for new products or for listing new coins, although the NYDFS later added a framework for self-certifying certain coins. The application process has been criticised as slow and costly, and several firms withdrew from New York when the rules took effect.
Holding a BitLicense has become a mark of regulatory credibility, but it applies only to New York; it does not replace licences elsewhere in the US.
Example
A crypto exchange that blocks New York residents at sign-up finally receives its BitLicense after a lengthy review and opens accounts to users in the state.
Related terms
Latest articles on BitLicense
- Mastercard Wins NY BitLicense to Advance Its Strategy for Stablecoins and Tokenized Deposits
- Galaxy Secures New York BitLicense to Expand Institutional Crypto Services
- Strike Secures Coveted BitLicense and Money Transmitter Approval in New York
- Epstein Files Reveal Meeting with New York Regulator During BitLicense Creation
- ErisX Receives BitLicense and Money Transmitter Licenses to Operate in New York