The New York State Department on Financial Services BitLicense
Any company operating virtual currency business activities in or from the state of New York are required to obtain a Bitlicense. This licence authorises that organisation to conduct within this market by either providing virtual currencies or services around it. A business that has obtained this licence is free to sell cryptocurrency. The New York State Department on Financial Services (NYDFS) has published regulatory framework for businesses seeking to apply.
The rules state that a licence is required for those engaging in any virtual currency business activity. Cryptocurrency exchange Coinbase obtained the license back in January 2017 to continue its services for buying and selling crypto. Though a business can conduct virtual currency business operations with the license they are still prohibited from engaging with those without.
Exemptions are made in the form of persons chartered under the New York Banking Law and merchants and consumers using virtual currency purely for the purchase and sale of goods, services and investment purposes. This suggests a company holding the BitLicense can cash out Bitcoin for a business selling goods solely with virtual currency.
The application process can be lengthy with multiple levels of verification conducted. The business must be willing to co-operate with full transparency to receive the licence and an application fee is also applicable to all applicants.
By implementing this process NYDFS is showing that its interests are with protecting the consumer. The licence will help to legitimatise those businesses that receive it whilst single out those that are operating within the state of New York that haven’t. A holder in the US looking to cash out crypto will have greater reassurance using a business that holds a BitLicense.
Remember to head to BC Bitcoin if you’re looking to sell crypto or to keep up with what’s going on in the crypto space.