BitLicense
In short: A BitLicense is a business license issued by the New York State Department of Financial Services (NYDFS) that allows a company to conduct virtual…
A BitLicense is a business license issued by the New York State Department of Financial Services (NYDFS) that allows a company to conduct virtual currency business activity involving New York or its residents. It was one of the first licensing regimes written specifically for crypto businesses.
Why it matters
Firms that transmit, store, buy, sell, exchange or issue virtual currency for New York customers generally need a BitLicense or a New York trust charter. To get one, applicants must meet requirements on capital, anti-money-laundering controls, cybersecurity, consumer disclosures and record keeping, and they remain under ongoing supervision afterwards. The process is known for being demanding, and some companies chose to stop serving New York rather than apply, which affects which services people in that state can use.
Example
A crypto company that wants to let New York residents buy, sell and store Bitcoin applies to the NYDFS and submits details about its owners, finances and compliance policies. Until it holds a BitLicense or another valid authorization, it typically blocks sign-ups from New York addresses. After approval, it must still file regular reports and allow examinations. The license covers New York only; other states and countries apply their own rules.