A BitLicense is the common term used for a business license of 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.
The regulations define virtual currency business activity as any one of the following types of activities:
- receiving virtual currency for Transmission or Transmitting virtual Currency, except where the transaction is undertaken for non-financial purposes and does not involve the transfer of more than a nominal amount of virtual currency;
- storing, holding, or maintaining custody or control of virtual currency on behalf of others;
- buying and selling virtual currency as a customer business;
- performing Exchange Services as a customer business, or;
- controlling, administering, or issuing a virtual currency.
The two following activities are excluded from the definition of virtual currency business activity:
- development and dissemination of software in and of itself;
- merchants and consumers that utilize virtual currency solely for the purchase or sale of goods or services or for investment purposes.
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".
Two virtual currency limited purpose trust company charters were approved by the NYDFS in 2015, the first in May 2015 to itBit, now Paxos Trust Company, and the second charter in October 2015 to Gemini.
In October 2015, an article 78 was filed in the Supreme Court of the State of New York challenging the authority of the New York State Department of Financial Services to define virtual currency. Justice St George heard the case on October 10, 2017 and dismissed the case on December 27, 2017. The case is currently on appeal.
On June 13, 2016, XRP II, LLC, an affiliate of Ripple Labs, was approved for a BitLicense. 
On 22 March 2017, Coinbase was awarded the second BitLicense. 
BitPay was awarded the eighth BitLicense in July 2018.
In November 2018, Texas-based Coinsource, an operator of Bitcoin Teller Machines, was awarded the twelfth virtual currency license or charter.
On December 3, 2019, SoFi Digital Assets, LLC, a subsidiary of Social Finance, Inc. was awarded the BitLicense as well as a money transmitter license.
On December 11, 2019, the NYDFS proposed a revision to the Bitlicense whereby a licensee can offer any coin from a public list on the NYDFS website. The revision is still pending.
In May 2020, Eris Clearing, LLC, a subsidiary of ErisX, secured a Virtual Currency License. 
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- Jose Pagliery, CNN (18 July 2014). "New York unveils Bitcoin license rules". CNN.
- "BitLicense Frequently Asked Questions". www.dfs.ny.gov. Archived from the original on 2018-09-26. Retrieved 2018-11-06.
- New York State Department of Financial Services (July 17, 2014). "NYDFS Releases Proposed BitLicense Regulatory Framework for Virtual Currency Firms" (Press release). Archived from the original on 2014-09-23. Retrieved July 19, 2014.
- New York State Register, Vol. XXXVI, Issue 23 (July 23, 2014), pp. 14-16. Rulemaking I.D. No. DFS-29-14-00015-P.
- New York State Register, Vol. XXXVII, Issue 8 (February 25, 2015), pp. 17-18. Rulemaking I.D. No. DFS-29-14-00015-RP.
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- NYDFS (September 22, 2015). "Press Release - NYDFS Announces Approval of first BitLicense application from a virtual currency firm". ny.gov. Archived from the original on January 31, 2018. Retrieved September 23, 2015.
- "DFS CONTINUES TO FOSTER RESPONSIBLE GROWTH IN NEW YORK'S FINTECH INDUSTRY WITH NEW VIRTUAL CURRENCY PRODUCT APPROVALS". www.dfs.ny.gov. Retrieved 2018-11-06.
- "Article 78 against NYDFS". Archived from the original on 2016-11-07. Retrieved 2016-11-06.
- "New York State Supreme Court Hearing Transcript" (PDF). Archived from the original (PDF) on 2017-10-31.
- "Press Release - June 13, 2016: DFS Grants Virtual Currency License To XRP II, LLC, an Affiliate of Ripple". Department of Financial Services. Retrieved 2020-05-06.
- "DFS AUTHORIZES COINBASE, INC. TO PROVIDE ADDITIONAL VIRTUAL CURRENCY PRODUCTS AND SERVICES: Coinbase is the Second Company to Receive DFS Approval to Offer Trading of Emerging Digital Currency Ethereum and the First to Offer Litecoin in New York". New York Department of Financial Services. 22 March 2017. Archived from the original on 18 May 2018. Retrieved 2019-10-28.
- "DFS GRANTS VIRTUAL CURRENCY LICENSE TO BITFLYER USA, INC". www.dfs.ny.gov. Retrieved 2018-11-06.
- www.dfs.ny.gov CONTINUES ACTIONS TO SUPPORT RESPONSIBLE INNOVATION IN NEW YORK’S FINTECH INDUSTRY https://www.dfs.ny.gov/about/press/pr1805171.htm=DFS CONTINUES ACTIONS TO SUPPORT RESPONSIBLE INNOVATION IN NEW YORK’S FINTECH INDUSTRY Check
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- "June 14, 2018: DFS Continues to Advance Responsible Growth in New York'S Fintech Industry with New Virtual Currency Approvals". www.dfs.ny.gov. Retrieved 2018-06-18.
- "June 18, 2018: DFS Grants Virtual Currency License to Square, Inc". www.dfs.ny.gov. Retrieved 2018-06-18.
- "July 16, 2018: DFS GRANTS VIRTUAL CURRENCY LICENSE TO BITPAY, INC". www.dfs.ny.gov. Retrieved 2018-11-06.
- "November 1, 2018: DFS GRANTS VIRTUAL CURRENCY LICENSE TO COINSOURCE, INC". www.dfs.ny.gov. Archived from the original on November 6, 2018. Retrieved 2018-11-06.
- "January 24, 2019: DFS CONTINUES TO ADVANCE RESPONSIBLE INNOVATION IN NEW YORK'S FINTECH INDUSTRY". www.dfs.ny.gov. Archived from the original on January 25, 2019. Retrieved 2019-01-24.
- "April 9, 2019: DFS GRANTS VIRTUAL CURRENCY LICENSE TO BITSTAMP USA, INC". www.dfs.ny.gov. Retrieved 2019-04-09.
- "Press Release - December 3, 2019: DFS Grants Virtual Currency and Money Transmitter Licenses to SoFi Digital Assets, LLC". Department of Financial Services. Retrieved 2020-01-24.
- "Press Release - December 11, 2019: Financial Services Superintendent Linda A. Lacewell Announces New Proposed Regime for Listing of Virtual Currencies". Department of Financial Services. Retrieved 2020-06-13.
- "Press Release - May 06, 2020: DFS Grants Virtual Currency and Money Transmitter Licenses to Eris Clearing, LLC". Department of Financial Services. Retrieved 2020-05-06.
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