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BitLicense

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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.[1][2][3] The regulations are limited to activities involving New York or a New York resident. Those that reside, are located, have a place of business, or are conducting business in the State of New York count as New York Residents under these regulations.

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.

But, the 2 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.

It came into effect on August 8, 2015. At least ten[4] bitcoin companies announced they were stopping all business in New York State because of the new regulations.[5][6] The New York Business Journal called this the "Great Bitcoin Exodus".[5]

In September 2015 the first BitLicense was issued to Circle Internet Financial.[7][8][9][10]

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.[11]

References

[12] [13] [14] [15] [16] [17] [18] [19] [20] [21] [22] [23] [24] [25]

  1. ^ Michael J. Casey (3 June 2015). "NY Financial Regulator Lawsky Releases Final BitLicense Rules for Bitcoin Firms". WSJ.
  2. ^ "New York lays out requirements for a 'BitLicense'". Fast FT.
  3. ^ Kaja Whitehouse, USAToday (3 June 2015). "'Bitlicense' rules regulating bitcoin released". USA TODAY.
  4. ^ Roberts, Daniel. "Behind the "exodus" of bitcoin startups from New York". Fortune. Retrieved 10 October 2016.
  5. ^ a b Michael del Castillo (August 12, 2015). "The 'Great Bitcoin Exodus' has totally changed New York's bitcoin ecosystem". New York Business Journal.
  6. ^ "Bitcoin company ditches New York, blaming new regulations". Fortune. June 11, 2015.
  7. ^ Paul Vigna (Sep 22, 2015). "Circle Gets First 'BitLicense,' Releases CirclePay, New Service". WSJ.
  8. ^ Karen Freifeld (September 22, 2015). "NY regulator issues first license for bitcoin company". Reuters.
  9. ^ Curt Woodward (September 22, 2015). "Circle gets first bitcoin license from New York regulators". betaboston.com.
  10. ^ NYDFS (September 22, 2015). "Press Release - NYDFS Announces Approval of first BitLicense application from a virtual currency firm". ny.gov.
  11. ^ "Article 78 against NYDFS".
  12. ^ Cameron Fuller (31 January 2014). "Bit Licenses: How Will New York Regulate Bitcoins?". International Business Times.
  13. ^ "Benjamin Lawsky unveils New York's historic BitLicense framework - New York Business Journal". New York Business Journal. 3 June 2015.
  14. ^ "Fmr New York bitcoin watchdog can't help bitcoin startups get license - Fortune". Fortune. June 11, 2015.
  15. ^ Ian McKendry (3 June 2015). "After N.Y. Makes 'BitLicense' Official, Focus Moves to Who's Next". American Banker.
  16. ^ "New York Releases Final BitLicense". CoinDesk.
  17. ^ Michael Bobelian (8 June 2015). "NY's BitLicense Reveals The Difficult Trade-offs Of Regulating Bitcoin". Forbes.
  18. ^ "NYDFS BitLicense Draft - Business Insider". Business Insider. 17 July 2014.
  19. ^ "What BitLicense Regulations Mean for Bitcoin". NASDAQ.com. 10 June 2015.
  20. ^ "New York Outs Final BitLicense For Bitcoin And Other Digital Currency Companies". Tech Times.
  21. ^ "New York Regulator Finalizes First-Of-Its-Kind Plan To Govern Virtual Currency With "BitLicense"". Consumerist.
  22. ^ "UPDATE 2-New York regulator issues final virtual currency rules". Reuters.
  23. ^ Mariella Moon. "New York sets rules for running Bitcoin exchange businesses". Engadget. AOL.
  24. ^ "Companies burdened by BitLicenses real cost - EconoTimes". EconoTimes.
  25. ^ "NYDFS Receives 22 Initial BitLicense Applications". CoinDesk.


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