Overview

A BitLicense is the common term used for a business license for virtual currency activities, issued by the New York State Department of Financial Services (NYSDFS) under regulations designed for companies. The regulations are limited to activities involving the state of New York or a New York resident. People residing in, located in, having a place of business in, or conducting business in the State of New York count as New York Residents under these regulations. The license was introduced and designed by Benjamin Lawsky, New York's first Superintendent of Financial Services, in July 2014.

Chartered entities do not require an explicit BitLicense, but may instead proceed with virtual currency activities via limited purpose trust charters approved by the NYDFS.

History

On July 17, 2014, the department released details on a proposed "BitLicense", which places regulations on any company or person that uses cryptocurrencies residing in New York. The proposed regulations were officially published in the New York State Register on July 23, beginning a 45-day comment period. On February 25, 2015, a revised proposal notice was published, beginning another 30-day comment period.

It came into effect on August 8, 2015. At least ten bitcoin companies announced they were stopping all business in New York State because of the new regulations. The New York Business Journal called this the "Great Bitcoin Exodus".

In September 2015, Boston-based Circle was granted the first BitLicense, although in December 2016 the company had pivoted away from its bitcoin exchange to focus more on payments.